The Evolution of the Raytheon Retirement Plan (1990–Present)

Raytheon has been a cornerstone of American defense and innovation for nearly a century. Founded in 1922 as the American Appliance Company, it soon became Raytheon Manufacturing and quickly grew into a technological powerhouse. From developing the first commercial microwave oven to pioneering missile defense systems, such as the Patriot, Raytheon has long stood at the intersection of engineering excellence and national security.

For generations of engineers, scientists, and support personnel, working at Raytheon meant being part of something bigger — a mission-critical company with global reach and national importance. And for many of those employees, Raytheon’s retirement plans were a key part of the total compensation package that rewarded long-term service.

But like the company itself, those retirement plans have evolved — dramatically.

This article traces the history of Raytheon’s retirement benefits from 1990 to today, laying the groundwork for a deeper exploration in future pieces. If you’ve spent your career at Raytheon or recently joined its successor, Raytheon Technologies (RTX), understanding this evolution is crucial for retirement planning.

1990–1998: The Era of Traditional Pensions

In the early 1990s, Raytheon offered a defined benefit pension plan (DB plan), formally known as the Raytheon Non-Bargaining Retirement Plan. This was a traditional final-average-pay pension that rewarded long service and salary growth.

Key Features:

  • Defined Benefit Formula based on years of service and final average compensation.

  • Vesting Period: Typically, five years.

  • Supplemental Pension Benefits: Some employees, particularly executives, qualified for supplemental executive retirement plans (SERPs).

  • Raytheon Savings and Investment Plan (SIP): A 401(k) plan was also available but was seen as a supplement to the pension, not the primary source of retirement income.

This era favored long-tenured employees. The focus was on company loyalty, with significant retirement security tied to staying with the company through retirement age.

1999–2006: Mergers and Modernization

This period was marked by structural shifts within Raytheon, including mergers, acquisitions, and divestitures that affected employee benefit structures.

Highlights:

  • Raytheon acquired defense units from Texas Instruments and Hughes Aircraft, bringing in employees with different retirement benefits.

  • In 2000, Raytheon began aligning plans across legacy companies, freezing or modifying some of the acquired companies’ DB plans.

  • For newer employees, Raytheon began emphasizing the Savings and Investment Plan (SIP), moving toward a defined contribution (DC) model.

This was a transition phase: while the DB plan was still in place for many, the writing was on the wall. Employees hired after certain dates were moved entirely into the DC world.

2007–2015: Shift to Defined Contribution

By the late 2000s, Raytheon had fully transitioned from offering pensions to relying on the SIP 401(k) plan for new hires.

Key Developments:

  • Pension Plan Freeze (2007): Raytheon froze its pension plan for non-union employees hired before a specific date. No new benefits accrued after the freeze.

  • Enhanced SIP Contributions: To offset the loss of the pension, Raytheon increased its contributions to the SIP.

    • Standard 3% match on the first 6% of employee contributions.

    • Additional “Retirement Savings Contribution” (RSC) for eligible employees based on age and years of service.

  • Investment Options Expanded: Raytheon offered a range of target-date funds, core mutual funds, and company stock.

This marked a clear break: for most employees, retirement income would now depend largely on personal contributions, investment decisions, and employer matches.

2016–2020: Stability Before the Merger

During this period, Raytheon focused on refining its retirement offerings, improving employee education, and enhancing digital access to retirement tools.

Notable Features:

  • Automatic Enrollment & Escalation: SIP began automatically enrolling new employees with automatic escalation features.

  • Fidelity Investments served as the recordkeeper during this period, offering access to planning tools and retirement projections. Plan administration later transitioned to Alight’s Your Gateway platform under the RTX Retirement & Savings Plan.

  • Continued RSC Contributions: The company maintained its Retirement Savings Contribution for grandfathered employees who had previously been in the pension plan.

These years were stable, but employees with prior pension accruals still needed to track both pension and SIP balances.

2020–Present: Raytheon Technologies and Post-Merger Plans

In April 2020, Raytheon merged with United Technologies Corporation (UTC), forming Raytheon Technologies (RTX). This had significant implications for retirement plans.

Major Impacts:

  • Legacy UTC vs. Legacy Raytheon Benefits: Employees from the two legacy companies had different retirement structures.

  • Unified 401(k) Plan under RTX: Eventually consolidated under the RTX Retirement & Savings Plan, now administered through Alight’s Your Gateway platform.

  • Pension Plan Consolidation and Freezes: Any remaining pension plans were either frozen or closed to new entrants. Former UTC employees with a cash balance pension also saw changes.

  • RTX Retirement & Savings Plan Today:

    • 401(k) with a tiered company match up to 4% of pay, and an additional 3%–7% age-based retirement contribution, depending on your age and years of service.

    • Employees who had a higher legacy match on December 31, 2022, may retain that rate temporarily — but those grandfathered rates expire on January 1, 2025.

    • Broad range of investment options, including target-date funds and a self-directed brokerage window.

What This Means for You

Understanding when you were hired — and under which plan you fall — is critical to optimizing your retirement strategy. Here’s a general rule of thumb:

Upcoming Articles

This overview sets the stage for deeper dives into specific topics. Upcoming pieces will explore:

  • How the Raytheon pension freeze affects your benefits today

  • Understanding Raytheon’s Retirement Savings Contribution

  • Raytheon Stock in Your 401(k): What You Need to Know About NUA

  • Transitioning from Raytheon employment to retirement: A checklist

  • Legacy employee benefits from Texas Instruments, Hughes, and UTC

Final Thoughts

Retiring from Raytheon — or RTX — means dealing with a patchwork of policies and benefit structures. Knowing where you fall on the timeline is the first step. But navigating what to do next — when to take your pension (if any), how to allocate your 401(k), and how to create retirement income — requires expertise.

If you're within 10 years of retirement, now is the time to plan ahead. Schedule a complimentary 15-minute call to get answers to your questions and start preparing for the retirement you deserve.

This material was written in collaboration with artificial intelligence (ChatGPT) and derived from sources believed to be correct.

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Julie Stordahl