General Motors, Ford and Stellantis will boost contributions they make annually to their employees' 401(k) accounts to 10% of salaries from 6.4% now, a UAW spokesman confirmed Nov. 1.
That significant increase will greatly improve workers' "ability to prepare for a secure retirement," according to a review on the UAW website of the benefits union members will enjoy from the recent accords hammered out with the three big automakers.
The UAW results – one of a number of recent wage negotiations with fairly impressive outcomes for workers in a tight U.S. labor market – could augur a middle-class comeback in the U.S., said Alicia Munnell, director and founder of the Center for Retirement Research at Boston College.
But even if such successes help to enhance retirement security for the middle third of U.S. 401(k) members, too many workers remain outside the system to expect the UAW success to prove a panacea more broadly for the country's retirement challenges, she said.
Hannah Schriner, a managing principal with Meketa Investment Group and head of the consulting firm's defined contribution practice group, likewise saw the UAW news as positive against the backdrop of continued retirement industry gains for DC plans, while noting that further details need to emerge before she can say just how positive.
With over 1 million active and retired UAW members, that rise to 10% is "huge," potentially a game changer in building momentum in the Taft-Hartley world, said Ms. Schriner. But with just over a third of the union's membership involved in auto manufacturing and hundreds of local unions under the UAW umbrella, it remains to be seen just how many members will enjoy that surge in company contributions to their 401(k) plans, she said.
A UAW spokesperson couldn't immediately provide data to compare the coming 10% contributions to the rate that prevailed before the global financial crisis of 2008 and 2009, when workers made deep concessions to help keep U.S. automakers afloat.
Representatives for GM, Ford and Stellantis didn't immediately respond to requests for comment.