The tendency to move from defined benefit pensions plans towards defined contribution plans which do not guarantee final pension amounts is being driven by the onerous costs of such plans to companies due to increasing life expectancy is not new to the US. Defined contribution plans have been commonplace since the 1980s. Workers in Schneider Electric have been covered by a guaranteed pension plan and the company is one of the last ones to announce the intention to close this plan - much to the disappointment of the machinists who strongly disagree.
After Boeing at the beginning of the year (cf. article No. 8065), the US subsidiary of Schneider Electric could be the next company where the machinist union (the International Association of Machinists, the IAM) fails to hold onto the guaranteed pension plan. In the context of the tri-annual negotiations, presently underway, the company has proposed doing away with the present pension plan and replacing it with a 401k plan which will not guarantee final pension payment amounts” states Tom O’He
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