GE aims to freeze UK pension plans to cut costs
- The company said its pension benefit obligation in the UK was about $14 billion at the end of 2020 and the proposal would help the company cut costs.
- The proposed changes to our U.K. defined benefit pension offerings are difficult" but help "solidify our financial position.
US conglomerate General Electric Co said on Monday it was proposing to freeze the accrual of pension benefits for about 2,800 employees in the United Kingdom to cut costs.
GE, which makes power plants and aircraft engines, has taken a series of actions in the past to manage its pension obligation and cut billions of dollars in debt, including by freezing the pensions for about 20,000 salaried US employees.
The company said its pension benefit obligation in the UK was about $14 billion at the end of 2020 and the proposal would help the company cut costs. GE's net debt in its industrial businesses stood at $34.5 billion as of Sept. 30.
"The proposed changes to our U.K. defined benefit pension offerings are difficult" but help "solidify our financial position," said Kevin Cox, GE's chief human resources officer.
The changes to the UK pensions are likely to come into effect Jan. 1, 2022 and the affected employees will automatically be enrolled into GE's existing defined contribution scheme, the company said.
There will be no change for GE retirees already collecting pension benefits and no change to existing benefits accrued by active members through Dec. 31, 2021, the company said.
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