Boeing's offer cuts current employees' pension growth rate

At the last joint Prof and Tech negotiations session (Aug. 23), The Boeing Company announced that it desires to cut the rate of growth of the pension basic benefit.

"Coupled with the company's offer to eliminate the pension for all new employees hired into the Professional and Technical bargaining units, it is very clear the company has no intention of sharing its success with the engineers and technical workers who helped turn the disaster of outsourcing into record orders and profits," the SPEEA Negotiation Team said in a message to members.

At this negotiation session, SPEEA repeated its request to see a full proposal from the company. Boeing representatives only said additional portions will be presented during the coming weeks. The next joint negotiations session was scheduled for Aug. 30 (after this issue of SPEEA News went to print).

The Boeing Company Employee Retirement Plan (BCERP) "basic benefit" is a fixed monthly benefit amount per year of BCERP Credited Service, currently at $83 per month. This basic benefit affects the Techs more than the Profs. The Profs are more affected by the "alternate formula." Both calculations are performed for each retiree and the one that generates the larger benefit is the one that is used for that retiree.

SPEEA proposed (June 15) to increase the basic formula at the historical percentage rate. SPEEA's redline proposal indicated increases to $88.43 on Jan. 1, 2013, $94.25 on Jan. 1, 2014 and $100.43 on Jan. 1, 2015. These reflect the BCERP basic benefit conversion factor increase equivalency from 1970-2012 of 6.5%.
Boeing's proposal called for a $2 increase in the monthly benefit amount each year, which would cause the factor to rise from $83 to $91 over the life of a four-year agreement. This equates to an average 2.3% growth over the length of the proposal, rather than the historical rate of 6.5%. 

Inflation

Unfortunately, as soon as one retires, the pension value instantly starts to lose purchasing power because the BCERP benefit is locked in regardless of increases in the cost of living. For example, while inflation has grown more than 60% since 1993, we have many retirees still living on pension checks based on the 1993 rate of $35 per year of service.

Taking inflation into account, SPEEA's proposal maintains a moderate inflation-adjusted growth rate. Boeing's offer to increase the pension basic formula less than inflation is a cut and will result in even less purchasing power available to the retiree.

This change applies to the “Basic (Standard) Benefit.” The “Alternate Benefit” has not been changed.