GE Unveils Pension Plan Changes Aimed at Paring Deficit, Debt Load
October 07 2019 - 7:51AM
Dow Jones News
By Colin Kellaher
General Electric Co. on Monday unveiled a series of changes to
its pension plans aimed at cutting the conglomerate's pension
deficit by up to $8 billion and its net debt by up to $6
billion.
GE said it plans to freeze its U.S. pension plan for roughly
20,000 employees with salaried benefits, along with U.S.
supplementary pension benefits for about 700 employees who became
executives before 2011.
The freeze, effective Jan. 1, 2021, won't affect retirees
already collecting pension benefits or employees with production
benefits, GE said, adding that it will record a noncash, pretax
curtailment charge on the move in the fourth quarter.
GE closed its pension plan to new entrants at the start of
2012.
The company also said it plans to pre-fund $4 billion to $5
billion of its estimated minimum funding requirements under the
Employee Retirement Income Security Act, or Erisa, for 2021 and
2022 using part of the roughly $38 billion it is netting from
divestitures.
GE also said it would offer lump-sum payments to about 100,000
former employees who haven't started collecting monthly pension
payments, adding that those distributions will come from existing
pension plan assets.
GE said it expects the moves will reduce its pension deficit by
about $5 billion to $8 billion and pare its net debt by $4 billion
to $6 billion.
Shares of GE, which closed Friday at $8.57, rose 2.6% in
premarket trading Monday.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
October 07, 2019 07:36 ET (11:36 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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