I joined Boeing as a new engineer from Portland State University in the spring of 2017, after they froze the pension. I've heard a lot about the demand for restoring it. Can someone share what the pension formula was, and is it really worth it compared to a 401(k)?
Thanks
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When I retired from Boeing in 2019, I converted my pension to a 401K lump sum. With the current round of inflation, it was the best decision I ever made concerning retirement security. Boeing offers one of the best, if not best, contributions to the 401K for the industry. I'm speaking about Boeing engineers when I say this. Put as much away as you can while you are young and your older self will thank your younger self down the road.
Can someone confirm whether the Boeing pension is adjusted for inflation? If it is not adjusted for inflation, then it’s really a bad deal, and those who are fighting to restore it are misguided.
Boeing pensions are not adjusted for inflation. So, l do not understand what the fuzz is about.
My last employer before now had a pension plan and then moved to 401K. When I left I had option to keep pension monthly benefits or take lump sum. Took lump sum because monthly benefits didn't have inflation protection.
If the bubble crashes on your 401k a couple years before retirement then good luck. Give me a pension any day before the stock market lie.
Pbgc will only pay pennies on the dollar
Boeing pension plan is protected by PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 (ERISA) to protect pension benefits in both single-employer and multiemployer private sector pension plans - the kind that typically pay a set monthly amount at retirement. If your plan ends (this is called "plan termination") without sufficient money to pay all benefits, PBGC's insurance programs will pay for the benefit provided by your pension plan,
Employers prefer 401(k) types of retirement plans, rather than the traditional pensions because it shifts the risks from the company to the workers. Under those pension plans the company agrees to make contributions into the plans, and those contributions are used to buy assets such as stocks and bonds. The contributions and the return on those assets are used to pay the benefits that are promised to the retirees. If returns are good, a company might not need to make additional contributions. But if plan assets lose value, the employer needs to come up with the additional contribution to pay the promised pension benefit.
But in plans such as a 401(k), those contributions, and the pay-outs, and the risk of the market, are entirely on the individual. If the value of retirement savings and investments in a 401(k) fall in value, the worker is the one who loses out, even if they’ve made steady contributions throughout their working life. Also, a retiree can outlive their assets in a defined contribution retirement account, whereas under a defined benefit plan, the plan has an obligation to pay only as long as the recipient, or a survivor in some cases, keeps living.
One other advantage of traditional pension plans in the private sector is that if the employer goes bankrupt and the plan doesn’t have the assets to pay benefits, the benefits are guaranteed by the Pension Benefit Guaranty Corp. The PBGC is a premium-supported agency similar to the Federal Deposit Insurance Corp., which backs bank deposits for customers.
Every 10 years of service you get $1000 per month as of now
So, if you worked for 20 years, your annual pension would be $2,000. If this is the case, I believe a traditional 401(k) is a better option.
Before I retired as a SPEEA member 3 years ago, the computation was $100 per year of service.
Every year of service you get $69.420 a month in retirement