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Engineers union dismisses Boeing 401(k) proposal

Boeing has proposed replacing its pension benefit with a 401(k) plan for new engineers, but SPEEA objects.

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By Michelle Dunlop
Herald Writer
Published:
A proposed retirement plan for future union employees remains a divisive point between the Boeing Co. and the union that represents engineers and technical workers.
Representatives of Boeing and the Society of Professional Engineering Employees in Aerospace (SPEEA) on Thursday resumed negotiations over a labor contract that expires Oct. 6. The two sides have been meeting for months to hash out an agreement that covers nearly 23,000 union members in the Puget Sound region.
The proposal presented Thursday by Boeing would eliminate the defined pension benefit for newly hired engineers and technical workers. Instead, those employees would have a 401(k) retirement plan. Current SPEEA members would remain on the company's pension program.
The 401(k) plan is the same as that offered to non-union employees at Boeing, said Bev Holland, Boeing spokeswoman. She noted that 23 other bargaining units across Boeing have accepted the 401(k) retirement plan.
SPEEA officials say that the 401(k) program reduces workers' retirement benefits by about 40 percent.
"Boeing's proposal to cut retirement benefits was made just days after the company reported second-quarter net income soaring to $967 million, up $26 million from the first quarter," union leaders said in a statement on SPEEA's website.
In an interview with The Herald in June, SPEEA's executive director, Ray Goforth, said the union would be receptive to a different retirement plan as long the new plan didn't cut the amount of money going to workers.
"It doesn't seem fruitful to us that a company as successful as Boeing wants to cut its employees' retirement benefits," Goforth said in June.
Holland said Boeing's proposed plan is competitive with what other aerospace companies offer.
The Chicago-based company had proposed a similar change in retirement during negotiations with SPEEA in 2008. Ultimately, though, the company agreed to keep the defined pension plan for both newly hired and current SPEEA members.
"The engineers and technical workers really are the foundation of our success," Holland said.
Other major issues, including wages and health care, also will need to be negotiated. SPEEA gave Boeing a full contract proposal in June. Although the union has said it wants a complete contract offer from the company, Boeing is taking the contract one step at a time.
SPEEA's bylaws require the union to mail contract ballots two weeks prior to the vote, meaning Boeing will likely present a full offer no later than mid-September. However, union leaders could extend the contract to continue talks.
Herald Writer Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.

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