How the Raytheon Pension Freeze Affects Your Benefits Today
If you worked at Raytheon before the mid-2000s, there’s a good chance you earned a pension — a defined benefit plan designed to pay monthly income in retirement based on your salary and years of service.
But in 2007, Raytheon froze its pension plan for most non-union employees. This move changed the game. And many employees still aren’t sure what it means for their future.
This article breaks down what the pension freeze actually did, how it affects your benefits today, and what you need to watch out for as you approach retirement.
What Exactly Was “Frozen”?
When Raytheon froze the pension in 2007, the company stopped the accrual of new benefits under the defined benefit plan for most non-union employees.
Let’s break that down:
What you keep:
Any pension benefits you earned before the freeze are still yours.
Your pension is vested if you met the service requirement (usually 5 years).
Your accrued pension will be paid out at retirement as a lump sum or monthly annuity (your choice, based on plan rules and interest rates).
What you lose:
You stopped earning new years of service toward the pension.
Salary increases after 2007 no longer affect your pension amount.
You can’t restart or grow the pension — it’s locked at its frozen value.
How to Find Out What You Have
If you were covered by the pension before it was frozen:
Check your latest pension estimate via Fidelity NetBenefits (for legacy pension records) or contact RTX Benefits Center for assistance.
Look at the monthly annuity estimate and lump sum value.
Pay attention to early retirement reductions — if you take it before age 65, your payout may be reduced unless you meet special eligibility (such as "Rule of 85").
What About the Replacement?
To offset the freeze, Raytheon introduced or enhanced its Retirement Savings Contribution (RSC) — a non-matching contribution to your 401(k) based on your age and years of service.
As of January 1, 2023, the RSC was replaced by a new contribution model under the RTX Retirement & Savings Plan. This includes:
– A tiered company match (up to 4% of pay)
– An age-based retirement contribution (3% to 7%)
These changes apply to most active employees. Those with RSC history may still see past balances in their 401(k) statements. If you were eligible for a higher match rate before 2023, that rate is set to expire on January 1, 2025, after which the standard contribution formula applies to all employees.
Key facts:
Automatically contributed by the company — no action required by you.
Varies between 3% and 5.5% of eligible pay.
Designed to help you build retirement savings in place of the pension.
If you were eligible before 2023, you may still see your RSC as a historical line item in your 401(k) account. The plan is now administered through Alight’s Your Gateway platform.
Timing Your Pension: Lump Sum vs Monthly Payments
You’ll likely have a choice between:
A monthly annuity for life
A one-time lump sum payout
The best option depends on your goals, health, and interest rate environment.
Important: The lump sum value is highly sensitive to interest rates. When rates rise, lump sum values drop — and vice versa.
If you're nearing retirement, timing your pension payout could significantly impact the total value you receive.
Common Misunderstandings
Let’s clear up a few myths we hear often:
"The pension is gone — I lost it."
Not true. It’s frozen, not eliminated. You still own whatever was earned up to the freeze date.
"My pension grows with inflation."
False. It’s fixed at the time of the freeze and does not increase unless specifically stated (very rare).
"I can retire early and get my full pension."
Only if you meet early retirement eligibility rules. Otherwise, early withdrawals are reduced.
What Should You Do Now?
Here’s how to stay in control:
Get your latest pension statement — know the value.
Understand your options — annuity vs lump sum.
Coordinate your pension with 401(k), Social Security, and other assets.
Plan ahead for taxes — especially if taking the lump sum.
Get help — these are high-stakes decisions, and one misstep can cost you thousands.
How We Can Help
We work with Raytheon and RTX employees navigating complex retirement decisions. Our team can:
Analyze your pension and 401(k) together
Model annuity vs lump sum scenarios
Time your benefits to minimize taxes
Create a custom retirement income plan
If you're within 5–10 years of retirement and have questions about your plan—or simply want a second opinion—we're here to help. Let's have a no-pressure conversation.
Curious about our process? Please click here.
This material was written in collaboration with artificial intelligence (ChatGPT) and derived from sources believed to be correct.
Stordahl Capital Management, Inc is a Registered Investment Adviser. This commentary is solely for informational purposes and reflects the personal opinions, viewpoints, and analyses of Stordahl Capital Management, Inc. and should not be regarded as a description of advisory services or performance returns of any SCM Clients. The views reflected in the commentary are subject to change at any time without notice. Nothing in this piece constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Advisory services are only offered to clients or prospective clients where Stordahl Capital Management and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Stordahl Capital Management unless a client service agreement is in place. Stordahl Capital Management, Inc provides links for your convenience to websites produced by other providers or industry-related material. Accessing websites through links directs you away from our website. Stordahl Capital Management is not responsible for errors or omissions in the material on third-party websites and does not necessarily approve of or endorse the information provided. Users who gain access to third-party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from the use of those websites. Please note that trading instructions through email, fax, or voicemail will not be taken. Your identity and timely retrieval of instructions cannot be guaranteed. Stordahl Capital Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.