By Matt Kempf
SPEEA Senior Director of Compensation and Retirement
The new year triggers changes for Profs and Techs regarding negotiated retirement benefits.
BCERP soft freeze: At the end of this year, SPEEA-represented Professional and Technical employees at Boeing stop accruing Boeing Company Employee Retirement Plan (BCERP) credited service. For these employees, all other aspects of the pension continue, so higher base salaries continue to grow your monthly pension benefit as will higher Employee Incentive Plan (EIP) payments and Lump Sum Awards (LSA).
401(k) matching changes: Today, some employees receive Company Matching Contributions of 75% of the first 8% (maximum match of 6%) and some employees receive 100% of the first 4% and 50% of the next 4% (maximum match of 6%). Starting Jan. 1, 2019, all employees receive Company Matching Contributions of 75% of the first 8%.
Special Company Retirement Contribution: In addition to the 401(k) Company Matching Contributions, SPEEA-represented Professional and Technical employees hired before the ratification of the 2016-2022 Collective Bargaining Agreement (Feb. 11, 2016) receive additional non-matching Special Company Retirement Contributions. Employees hired after the ratification of this agreement will not earn additional 401(k) contributions. Special Company Retirement Contributions are made per pay period on eligible pay, which is defined as base pay, shift differential, Lump Sum Award payments (made pursuant to Article 11) and Employee Incentive Plan payments made on or after Jan. 1, 2019.
Employees currently earning BCERP credited service (which ends Dec. 31, 2018) will receive a 9% Special Company Retirement Contribution for 2019.
Employees not currently earning BCERP credited service, but on the active payroll or an approved leave of absence of 90 days or less on the date of ratification of this 2016-2022 agreement (Feb. 11, 2016) receive an additional 3%.
Supplemental Savings Plan: When added to the personal 401(k) savings of the employee, matching and non-matching contributions, the 2019 additional special company contributions may result in an individual hitting the IRS limitation for defined contribution plans under Section 415(c), which is $55,000 for 2019. When an individual hits the 415(c) limit, all 401(k) contributions must stop, including employee contributions, company matching and non-matching contributions. Unfortunately, this IRS rule may result in an individual losing matching and non-matching Boeing funds.
For example, an engineer hired before March 1, 2013 with a base salary of $150,000 contributing 30% into their 401(k) (pre-tax and after-tax combined) would hit against the 415(c) limit sometime in mid-October 2019, even if you were to assume a 0% raise in March 2019 and also assuming they do not direct the EIP or the LSA into the 401(k). For the remaining two and a half months of 2019, they would lose Boeing’s 9% Special Company Contributions and the 6% Boeing matching funds, totaling a loss of approximately $8,600 of Boeing’s money. The new 2019 Supplemental Savings Plan (SSP) allows individuals to save funds in excess of the 415(c) limit in an unfunded, non-qualified plan. Individuals with the potential to exceed the 415(c) limit will be notified by Boeing about the opportunity to enroll in the SSP mid-October and the enrollment timeline in the plan will mirror the annual open enrollment.
Some individuals may enroll in the SSP plan and others may instead reduce their 401(k) savings so that they do not lose any Boeing matching and non-matching funds. As with all enrollments, individuals should carefully read the documentation and fully understand the benefits and consequences of enrolling in the Supplemental Savings Plan.
Attend a SPEEA retirement seminar - see the 2019 schedule.