General Electric (NYSE:GE) is freezing pension plans and that’s going to upset some of its employees.
Here’s what to know about the GE pension freeze.
- GE is freezing the pension plan for 20,000 of its employees.
- There are also 700 executive employees that are seeing their supplementary pension benefits frozen.
- That means that these employees won’t be able to put progress toward retirement into the plan.
- However, what has already been saved by employees is still there and will be available to them.
- The GE pension freeze will go into effect on Jan. 1, 2021.
- After this, employees that are part of the pension plan will see 3% of their salaries go toward a 401(k) plan.
- GE will also be matching 50% of employee contributions up to 8%.
- It also means that GE employees that are currently receiving their pension payments will continue to do so.
- One this worth noting about this is that GE hasn’t been allowing any new employees to sign up for the pension plan since 2012.
- The reason behind the GE pension freeze is the company wanting to reduce the pension deficit it currently faces.
- This has reached a total of $8 billion.
- It is also planning for this change to help it reduce its total net debt by $6 billion.
- Unfortunately, this change is likely going to hurt morale at the company as employees change plans for the future.
GE stock was up slightly as of Monday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.