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General Electric Freezes Pension Plan in Trend Seen Across Industries

At the end of the third quarter, General Electric Company (GE) announced in a corporate statement that it is freezing benefit accruals in their plan that covers over 20,000 employees with salaried benefits, effective January 2021. In addition, they are planning to offer lump sum payments to over 100,000 former employees not yet in pay status. The plan has been closed to new participants since 2012. In turn, GE will begin to contribute 3% of eligible compensation to the 401(k) plan and provide matching contributions of 50% on up to 8% of eligible compensation. The plan is one of the largest in the U.S., and this change is seen as being tied to corporate policies aimed at improving the company’s financial position and reducing debt, following significant concerns about accounting practices. The company also stated that the plan had a funded status around 80% at the end of 2018.