John Deere keeps coming up in conversations about pension holdouts for good reason. The company runs active defined benefit plans for both UAW-represented hourly workers and a subset of salaried employees, which is rare enough in 2026 that it's worth examining how those plans work and what the benefits are actually worth.
Two separate plan structures
Deere operates distinct pension plans for hourly UAW-represented workers and salaried employees. The formulas differ, the benefit levels differ, and the history of each plan reflects its negotiating context.
For UAW workers, pension terms are negotiated through collective bargaining with the United Auto Workers. The UAW-Deere contract specifies the pension multiplier per year of service and the provisions that govern 30-and-out retirement eligibility. Benefits for UAW-represented workers at Deere manufacturing facilities in Moline, Waterloo, Dubuque, and other locations have increased meaningfully through successive contracts.
For salaried employees, Deere maintains defined benefit coverage for employees hired before certain cutoff dates, with newer hires receiving 401(k)-only benefits. Salaried employees under the DB plan use a final-average-pay formula tied to career compensation and years of credited service.
The 2021 UAW strike and what it produced
The October-November 2021 UAW strike at John Deere lasted 35 days and covered roughly 10,000 workers at major US manufacturing facilities. The final contract included meaningful pension improvements: higher multipliers per year of service for hourly workers and adjustments to early retirement provisions that made 30-and-out more valuable for long-tenure workers.
The 2021 contract also confirmed that pension benefits accrued during the strike period. Workers who were on strike still received credit toward years of service for pension calculation purposes, which was a specific point of negotiation.
The result for a Deere UAW worker who completed 30 years of service after the 2021 contract is a meaningfully higher monthly benefit than the same worker would have received under the pre-strike contract terms.
Typical benefit range and worked lump sum example
For UAW hourly workers at Deere with 30 years of service, monthly benefits typically range from $2,000 to $3,800 depending on the specific multiplier in effect for their service years and any early retirement adjustments. Salaried employees with longer tenure and higher compensation can reach $4,000 to $5,800 per month at the upper range.
At 2026 segment rates of 5.03%, 5.35%, and 5.57%, a $2,800/month benefit for a 60-year-old retiring with a 25-year payment horizon projects as follows. Years 1-5 of payments ($2,800 x 12 x 5 = $168,000 undiscounted) present-value at 5.03% to approximately $144,700. Years 6-20 ($2,800 x 12 x 15 = $504,000 undiscounted) present-value at 5.35% to approximately $311,000. Years 21-25 ($2,800 x 12 x 5 = $168,000 undiscounted) present-value at 5.57% to approximately $55,000. Total IRS-formula lump sum equivalent: approximately $510,700 for a $2,800/month benefit starting at age 60.
For a $4,500/month salaried benefit at the same age, the lump sum equivalent reaches roughly $820,000. These are the numbers your plan actuary would produce using the same methodology.
Does Deere offer lump sum buyout windows?
Deere has offered targeted lump sum elections to terminated vested and retired participants in recent years, but hasn't conducted a major broad buyout comparable to GM's 2012 offer or GE's 2021 window. The active status of the plans reduces the company's urgency to buy out participants in bulk.
For deferred vested participants who left Deere before retirement, periodic lump sum election windows have been offered. If you left Deere with a preserved pension and haven't elected a payment form, check with Deere's benefits service center for current information about any available elections.
The break-even question for early retirees
Deere's 30-and-out provision means many workers retire in their early to mid-50s. This changes the lump sum math significantly. A 52-year-old with $2,800/month and a 33-year payment horizon has a much larger lump sum equivalent than a 65-year-old with the same monthly benefit, because there are more future payments to discount.
At 2026 rates, a 52-year-old with $2,800/month has an IRS-formula lump sum equivalent of approximately $640,000, compared to $510,700 at age 60. The longer the payment horizon, the larger the lump sum, which is why early retirement windows at favorable rates can be quite valuable for union workers who qualify.