Boeing Co.'s contract proposal with a West Coast engineering union that included replacing for new employees their defined benefit plan with an enhanced 401(k) plan was overwhelmingly rejected by union members in voting that ended Monday.
Members of the Society of Professional Engineering Employees in Aerospace, IFPTE Local 2001, voted 9,770 to 454, or 95.56%, to reject the contract proposal and members of its technical unit voted 5,327 to 154, or 97.19%, against, according to a statement from the union.
In all, 71.9% eligible members voted, the statement said. The IFPTE local has 15,730 members and the technical unit, 8,036 members.
Contract negotiations were set to resume Tuesday afternoon at a Boeing office in Tukwila, Wash., said Ray Goforth, executive director of the SPEEA IFPTE local.
Mr. Goforth was uncertain what parts of the contract proposal would be discussed in the restarted negotiations.
The three-year contract expires Saturday with provisions extending it to Nov. 25, said Charles Bickers, Boeing spokesman.
Chicago-based Boeing's proposal included a 3% to 5% age-based company contribution in addition to the current 6% company match on employee deferrals to the existing $35 billion Boeing Voluntary Investment Plan 401(k).
“We were ready to entertain an idea of ending the defined benefit plan if (the 401(k) proposal) was a true replacement plan,” Mr. Goforth said.
But the proposal would have amounted to a 40% reduction in overall pension benefits for new employees, Mr. Goforth said.
The union members participate in the $13.8 billion Boeing Co. Employee Retirement Plan, a defined benefit plan that was 100% funded as of Jan. 1, 2011.
In all, Boeing's DB plans had a combined $50.8 billion in assets and $67.4 billion in liabilities as of Dec. 31, according to its most recent 10-K filing.