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Workers Lose Again: GE Freezes Pension Plans
American Middle Class

Workers Lose Again: GE Freezes Pension Plans

The estimated reading time for this post is 81 seconds

General Electric (GE) freezes pension plans for 20,000 employees with salaried benefits in 2021. The company expects to reduce its pension deficit by approximately $5-8 billion.  The market loves the news; GE stock is trading 2 percent higher in pre-market trading.

General Electric’s pension plan has been closed to new employees since 2012.  Freezing it for 20,000 with salaried benefits in 2021 is cruel and hurtful to those workers.  More and more companies are shifting all financial obligations from healthcare to retirement benefits to workers.

Defined-contribution plan like a 401 (k) or 403(b), with anemic or no employer match, is now the norm.  GE refers to its shift as being industry standards and competitive market practices. Workers lose again.  

Kevin Cox, chief human resources officer at GE, stated that “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.”  GE needs dedicated and talented employees to return to a position of strength. Shifting all financial obligations to those employees might not be the wisest decision.

General Electric has been facing severe business operational issues lately.  Harry Markopolos, the forensic accountant who warned the Security Exchange Commission (SEC) published a full report a couple of months ago accusing GE of accounting frauds and comparing it to Enron.

In June 2018, the Dow Jones Industrial Average removed GE from its index, and It wrote off a $23 billion goodwill for its power business.

In 2018, key executives’ compensations were nearly 68 million dollars.  GE needs to structure its operations to improve its financial position. Shifting financial obligations to employees is the wrong way to start.  

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