- General Electric freezes the pensions of 20,000 American wage earners to reduce billions of future retirement liabilities and release debt.
- About 700 employees in a supplementary, employee-oriented retirement program will also be frozen in retirement benefits.  The company stated that the change would not affect the already fired GE employees.
General Electric has announced that it will freeze the pensions of 20,000 American workers on wages – a measure aimed at reducing the pension deficit and limiting debt. The move will reduce GE's pension deficit by as much as $ 8 billion and net debt by as much as $ 6 billion.
As part of the pension freeze, an industrial conglomerate said it would freeze additional retirement benefits for approximately 700 executives by 201
"The return of GE to a strong position has required us to make several difficult decisions, and today's decision to freeze our pension is no exception," said Kevin Cox, GE's Chief Human Resources Officer.
As part of such efforts, the company said it would spend $ 5 billion last month on debt repayment. But efforts to reduce debt can also hurt employee morale while CEO H. Lawrence Culp, Jr.into a problematic conglomerate.
"The impact on the involvement / morale of some employees is unlikely to be positive for these retirement measures, but in a corporate battlefield situation, this is typically typical if an accident," Barclay analyst Julian Mitchell noted in a post about Monday's research.
Culp, turn specialist, received over $ 15.3. for the past year, or 345 times the average salary of a GE employee in 2018 of about $ 43,500, according to Equilar.
What is a pension freeze?
The freezing of pensions effectively limits new benefits from accrual to a retirement account, the Pension Rights Center reports. GE has stated that 20,000 workers affected by the changes will not accrue additional benefits and will not make workers' contributions after January 1, 2021.
GE said that freezing pensions would not affect retirees who are already collecting retirement benefits or workers with production benefits.
Like other corporations, GE is ending its retirement amid a push toward self-funded retirement plans such as 401 (k) s. GE has said it has not allowed new workers to join its retirement plan since 2012.
"Today's actions more closely align GE's strengths with current industry standards and competitive market practices," the company said in a statement Monday.
In addition, GE also stated that it offers a lump sum of approximately 100,000 former employees who did not start their monthly retirement benefits. The company said it would send a notice to those eligible employees and would pay a lump sum in December.