General Electric Co. said Monday it plans to freeze its U.S. pension plan for about 20,000 salaried employees and its U.S. supplementary pension plan for some 700 employees.
Employees affected by the freeze will move into the firm’s 401(k) plan effective Jan. 1, 2021.
GE’s pension plan has been closed to new entrants since Jan. 1, 2012.
In addition, GE is offering a lump-sum payment option for a limited time to roughly 100,000 eligible former employees who have not started monthly U.S. GE pension plan payments. Those who elect to receive a lump sum should expect to receive it in December.
These actions are being done in an attempt to reduce GE’s pension deficit by $5 billion to $8 billion and its industrial net debt by $4 billion to $6 billion.
“Returning GE to a position of strength has required us to make several difficult decisions, and today’s decision to freeze the pension is no exception,” said Kevin Cox, chief human resources officer at GE, in a news release announcing the actions. “We carefully weighed market trends and our strategic priority to improve our financial position with the impact to our employees. We are committed to helping our employees through this transition.”
These actions will not affect retired GE employees already collecting pension benefits or employees with production benefits.