There have been many letters, both pro and con, about the machinists’ contract in recent weeks. I’m not a Boeing employee, and I claim no right to judge their decision, but an excerpt from the letter “Shifting burden hurts everyone” caught my attention.
With regard to the shifting of retirement planning risk from Boeing to the employees (i.e., defined benefit = pension vs. defined contribution = 401(k)), the writer says: “Is this a good thing? In my opinion, no. Why? this shift in plan design makes a group of employees responsible for their own outcomes. For many this is going to be an impossible task given that many are spenders not savers.”
Only about 26 percent of workers in this country now have access to a pension, with most of those being in the government sector where over 80 percent of employees still have access to a pension. The 401(k) was developed in the 1980s to encourage more workers to save and invest for their own retirement rather than rely completely on Social Security. I’m not arguing whether this seismic shift from pensions to 401(k)s is good or bad but it is reality. The point is that most people in this country are already “responsible for their own outcomes” when it comes to preparing for their retirement.
The writer then correctly hits on the key issue for retirement planning in this country: “This is going to be an impossible task given than many are spenders, not savers.” While we all long to be spenders and not savers, the reality is that we each have to plan for our own future. I, for one, have complete faith in the ability of Boeing workers to make this transition and plan responsibly for their own retirement, even with a changing set of retirement benefits. The writer is worried they will fail and be a burden on the rest of us. Let’s not underestimate them.