General Electric’s pension freeze will have an impact on its nuclear and aviation units, company officials said Monday.
GE announced Monday that it was taking actions related to its U.S. retirement benefits as part of a series of moves in its strategy to improve its financial position, according to a news release.
The company has been struggling in its profits over the years, and in 2018, restructured the company
under its new CEO Larry Culp, among other initiatives that followed to decrease debt.
In total, the actions GE announced Monday are expected to reduce the company's pension deficit by approximately $5 billion to $8 billion and industrial net debt by approximately $4 billion to $6 billion, stated the release.
Officials said the company is freezing pensions for about 20,000 employees with salaried benefits.
A spokesperson with GE corporate said in an email Monday that the figure includes some employees from GE Aviation and GE Hitachi Nuclear Energy, which is headquartered in Wilmington.
GE Hitachi’s headquarters and a GE Aviation facility share a campus off Castle Hayne Road in Wilmington. The GE site in Wilmington employs about 2,800 people.
The freeze impacts employees that began working for GE before it closed the plan to new entrants in 2012, the spokesperson said. GE’s pension plan has been closed to new entrants since January 1, 2012, stated the release.
“We have not broken out specific impact by business,” the spokesperson said in an email. “The changes do not impact any union or non-union production workers or retirees.”
The impacts also include U.S. supplementary pension benefits for about 700 employees who became executives before 2011, stated a news release.
The changes will go into effect Jan. 1, 2021.
The company’s moves also included offering a limited time lump-sum payment option to about 100,000 eligible former employees who have not started their monthly pension payments, according to a company news release.
Notices will be provided to eligible participants, stated the release. Those who elect to receive a lump sum should receive it in December.
“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. "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."