GE to Freeze the Pensions of Thousands of its American Workers

General Electric announced on Monday that it is freezing the pension plans for around 20,000 American employees with salaried benefits.

The bold move is being done in efforts to cut debt and decrease the company’s pension deficit by up to $8 billion.

Roughly 700 employees in the company’s supplemental pension program will also have their pension benefits frozen. These pension plans are typically for executives.

Already retired GE workers will not be affected by the change.

“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.
Today’s actions more closely aligns GE benefits with current industry standards and competitive market practices,” the company said.

“The impact on employee engagement/morale of some of these pension measures is unlikely to be positive, but in a situation of ‘corporate battlefield surgery,’ this tends to be a typical, if unfortunate casualty,” remarked Barclay’s analyst Julian Mitchell in a Monday research note.

Disclaimer: We have no position in General Electric Company (NYSE: GE) mentioned and have not been compensated for this article.