Boeing offers one of the most well-known corporate defined benefit pensions in American manufacturing and aerospace. The Boeing Company Pension Value Plan (BCPVP) was frozen for salaried employees in 2016, but tens of thousands of retirees and deferred vested participants still hold accrued benefits. If you've received a lump sum election notice -- or if you're simply trying to understand what your monthly pension is worth today -- the math is worth running.
What the Boeing pension freeze means
Freezing a pension plan doesn't eliminate existing accrued benefits. It stops new service credits from accumulating. If you worked at Boeing in a salaried capacity before 2016, your benefit reflects the years and salary history you had at the freeze date. Nothing has been taken away -- the plan just stopped growing for salaried employees after that point.
IAM-represented hourly workers in Boeing's union plans had different arrangements, with pension improvements negotiated through collective bargaining agreements. The salaried freeze didn't affect their accruals.
The lump sum calculation
Boeing uses the IRS 417(e) formula to calculate the present value of your monthly pension for any lump sum election window. The formula discounts each future monthly payment back to today using three segment rates tied to corporate bond yields.
For 2026 plan years (using November 2025 rates), those rates are 5.03%, 5.35%, and 5.57% for years 1-5, 6-20, and 21+. Boeing's plan may use the August or October lookback month rather than November -- check your election notice for the specific rates applied. The difference in rates affects your lump sum by thousands to tens of thousands of dollars.
Use the calculator on this site to verify the math. Enter your monthly pension benefit, your age, and the segment rates from your election notice. The resulting present value is what your annuity is worth at those rates. If Boeing's offer is within 2-3% of that figure, it's actuarially fair. If it's more than 5% below, ask Boeing's pension administrator which mortality table they used and which lookback month.
What's changed since the 2012 and 2015 windows
Boeing offered major lump sum election windows to deferred vested salaried participants in 2012 and 2015. Those offers were calculated using segment rates from prior periods -- rates that were substantially lower than today's. Lower segment rates mean higher lump sums. A $3,000/month pension that was worth roughly $560,000 as a lump sum under the 2015 rates is worth approximately $430,000 under 2026 rates. The pension itself didn't change. The interest rate environment did.
This matters because some Boeing retirees declined earlier lump sum windows expecting better offers later. With rates materially higher today than in 2015, later offers will produce smaller lump sums unless rates fall significantly before the next window. The annuity's underlying value hasn't changed -- the discount rate has.
Retiree healthcare
Boeing has historically offered retiree medical coverage to eligible employees and retirees. Before making any pension election decision, confirm explicitly with Boeing's benefits service center what happens to your retiree healthcare coverage if you take the lump sum vs. the annuity. In some plans, taking the lump sum affects retiree medical eligibility. In others, it's completely separate. This is not spelled out in the lump sum offer letter and you need to ask.
The break-even analysis
For most Boeing pensioners at current segment rates, the break-even age -- the age at which cumulative annuity payments exceed the lump sum value -- falls between 80 and 84 depending on your specific benefit and age. If you're 65 and in good health with a family history of longevity, the annuity is likely to pay more over your lifetime. If you're 65 with significant health concerns or no surviving spouse who needs continued income, the lump sum has a stronger case.
Run the break-even analysis in the pension calculator here: enter your monthly benefit, your current age, your expected retirement age (or current age if already retired), and a life expectancy. The break-even age tells you exactly when the annuity catches up to the lump sum in cumulative terms.
Rollover mechanics
If you take the lump sum, request a direct rollover to a traditional IRA or qualified retirement plan. A direct rollover is not a taxable event. If you receive the check directly, Boeing is required to withhold 20% for federal taxes, and you have 60 days to deposit the full original amount (including the withheld 20%) into an IRA to avoid taxation on the entire distribution. Almost everyone should take the direct rollover.
Once in an IRA, you're responsible for managing the funds and taking Required Minimum Distributions starting at age 73. The IRA gives you full investment flexibility and the ability to name beneficiaries directly -- benefits the annuity doesn't offer. But the annuity's guarantee that you cannot outlive your income is something no portfolio can replicate without purchasing an annuity yourself.
One more thing
Boeing's pension election windows are not permanent offers. If a window closes and you didn't elect, you typically wait for the next one (often years away) or continue receiving the annuity as-is. If you're currently in an active window, the decision timeline is real. Get a fee-only fiduciary financial advisor involved before the deadline. The cost of a consultation is trivial relative to the magnitude of a six-figure irreversible decision.