Pensions Making a Comeback? Unions Push for Defined-Benefit Plans in Strikes

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Unions have asked for a restoration of defined-benefit retirement plans in recent strike negotiations, signaling a renewed appetite for pensions rather than the defined-contribution plans that have dominated the employer-sponsored retirement landscape for several decades. Boeing’s pension, which the company froze in 2014 in favor of a 410(k) retirement plan, was central to negotiations in last year’s machinists strike, according to an analysis by the Federal Reserve Bank of St. Louis. The report noted that the Boeing situation is not unique. The United Auto Workers (UAW) strike in 2023 also included compromises around pensions.

Since 1989, participation in defined-benefit retirement plans has fallen from about 60 percent of employees to about 20 percent, while defined-contribution plans have grown from about 55 percent of savers in employer-sponsored plans in 1989 to 80 percent today, according to the study. The decline in defined-benefit pension plan participation has been consistent across industries—except among public administration workers, who remain in pension plans at a higher rate than other workers because of the Federal Employees Retirement System, which offers federal employees both defined-benefit and defined-contribution options.