GE aims to reduce its pension deficit by up to $8 billion, and says this 'difficult decision' is necessary to return it to 'a position of strength.'
General Electric Co. said Monday it is freezing pensions for about 20,000 U.S. employees with salaried benefits, as part of its plan to reduce its pension deficit by up to $8 billion.
The company said there is no change for GE retirees already collecting pension benefits or employees with production benefits. GE’s pension plan has been closed to new entrants since 2012. The company said it would use a portion of the $38 billion in cash it has identified or collected from assets sales to fund the pension moves, which includes pre-funding an estimated $4 billion to $5 billion of its requirements under the Employee Retirement Income Security Act for 2021 and 2022.
GE said the former employees who elect to take a lump-sum payment should expect to receive the money in December. The company said it will fund the lump-sum payments from existing assets in the GE Pension Trust, which was funded at 80% as of the end of 2018. GE expects to record a yet-to-be-determined fourth-quarter charge because of this.
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