7 March 2014
Boeing (NYSE: BA) said it has provided advance notice to nonunion employees participating in the company´s defined benefit pension plans that they will transition in 2016 to a company-funded defined contribution retirement savings plan.
Beginning Jan. 1, 2016, Boeing will make cash contributions each pay period to employees´ retirement savings through a new defined contribution component of the 401(k) plan. All benefits earned in the current traditional pension plan prior to the transition will be paid to employees in retirement, and the company will continue to match employee savings in an existing 401(k) plan.
The transition covers roughly 68,000 employees, including managers and executives, who participate in the main Boeing and subsidiary defined benefit pension plans. Retirees already receiving pension benefits are not affected by this change.
The company expects the changes to have an immaterial impact on 2014 core (non-GAAP) earnings. GAAP earnings for 2014 will also include a non-cash pension curtailment charge of approximately USD110m that will be recorded in the first quarter. The USD110m charge is in addition to previously announced USD140m and USD80m non-cash charges also being recorded in the first quarter for changes to retirement plans under the contract agreements with the IAM 751 and IAM 837 unions.