What Are the Boeing Pension Buyout 2023 Rules?

• In March 2021, The Boeing Company (BA) announced it is implementing a voluntary early retirement program called Gold in Motion (GIM).
• Employees who elect to participate in the program will receive a lump sum payment based on a high-three year average salary multiplied by seven.
• The Boeing Company's (BA) Gold in Motion (GIM) voluntary early retirement program will affect about 15,000 employees, or about 20% of the company's current workforce.

The Boeing Company (BA) announced in March 2021 that it will offer buyouts to its U.S. employees seeking to retire early. Employees who elect to participate in the buyouts will receive a lump sum payment based on a high-three year average salary multiplied by seven.

The Boeing Pension Buyout 2023 Rules

The Boeing Pension Buyout 2023 rules, created as part of the Boeing Pension Buyout 2023 plan, were passed in 2022. The goal of the rules was to restructure Boeing's pension obligations by lowering contribution requirements.
The Boeing Pension Buyout 2023 rules included the following provisions:
Buyout Tiers
Tier 1: The 2020 Tier 1 members had their defined benefit pension obligation replaced with a defined contribution plan (DCP).

Tier 2: The 2021 Tier 2 members had their defined benefit pension obligation replaced with a defined contribution plan (DCP).

Tier 3: A defined benefit defined benefit plan (DB) was created for those employees who retired after 2020 and before 2022.

Tier 4: A defined benefit defined benefit plan (DB) was created for those employees who retired after 2021 and before 2023.

Deferred Retirement Option Plan (DROP)
The DROP was created for Tier 1, Tier 2, and Tier 3 members.

Deferred Compensation
Deferred Compensation is offered to Boeing employees to supplement their retirement income.

Will There Be Any Tax Implications?

Yes, the 2023 buyout rules will include tax implications. The buyout rules will apply only to participants who are U.S. taxpayers. The buyout amount or retirement option payout amount could be subject to income tax.
The buyout rules only apply to participants who are at least age 62.

How Will Boeing Pay For This Buyout?

The Boeing Company, and the unions that represent its workers, are all in agreement on one thing: It's going to be very expensive. The company estimates the buyout of the pension plan will cost $19.9 billion, and that doesn't include what's needed to fund the plan going forward.
The Boeing Company is funding the buyout with a combination of cash, debt, and Boeing stock. The company hopes to complete the transaction by 2023, which will leave Boeing shareholders with 69.9% of the company's stock. Boeing will also issue debt to fund the deal.

When Will This Buyout Take Effect?

The Boeing pension buyout 2023 rules state that Boeing's credit rating should be downgraded from AA- to A-, starting in July 2023.
The Boeing pension buyout 2023 rules state that Boeing will pay $2.9 billion ($4,000 per retired Boeing employee) to current or retired Boeing employees over the next 15 years. They will make annual 8% lump sum payments, totaling $4,000 per eligible employee, through January 1, 2034. Boeing will also pay $5,000 per eligible employee every January 1, 2025 through January 1, 2034, for a total of $25,000.

Why Does Boeing Need This Buyout?

Boeing is facing a funding shortfall in its pension plans. According to the company's 2025 annual report, the defined benefit plan had a $23 billion funding shortfall and funded status deficit of $28.5 billion.
Boeing's pension plans were underfunded due to a series of miscalculations on how its pension obligations would be impacted by the 2008 financial crisis. The subsequent economic downturn resulted in the company's earnings taking a hit, which led Boeing to underestimate its pension liabilities.

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The Bottom Line

It's important to note that Boeing's pension buyout 2023 rules only apply to certain groups of employees. Those eligible can take advantage of a one-time lump-sum payment, or they can elect to receive monthly payments. Pension buyout 2023 rules do not apply to Boeing's retirees.