BOSTON — General Electric intends to freeze the pension plan for more than 20,000 employees, according to an announcement the company posted on its website Monday.
Approximately 20,000 employees with salaried benefits and 700 employees with supplementary benefits will be affected.
The changes, which pertain to employees who became executives before 2011, will become effective Jan. 1, 2021. There is no change for GE retirees already collecting a pension. Approximately 100,000 former employees who have not started collecting monthly benefits will be offered a lump sum payment, the company said in a statement.
The cuts, which impact management only, are aimed at improving the company’s financial position and expected to reduce GE’s pension deficit by $5-8 billion, reads the company statement.
“Returning GE to a position of strength has required us to make several difficult decisions and (Monday’s) decision to freeze the pension is no exception,” Kevin Cox, GE’s chief human resources officer, said in a statement.
“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.”
But Adam Kaszynski, president of International Union of Electrical Workers (IUE) Local 201, which represents 1,250 employees at GE’s River Works Plant in Lynn, said the cuts follow a pattern he’s seen with the company.
“GE first will go after the salaried people and then, basically, they go after us,” said Kaszynski. “What this sounds like to me is a clear warning shot to us that GE is going to propose pension freezes in our next contract. We’re sick and tired of takeaways.”
In the past, GE eliminated post-65 healthcare plans and its pension plan has been closed to new employees since 2012, he said.
In August, IUE-CWA (Communication Workers of America) and GE agreed to a four-year labor contract. But it came after the union turned down an initial offer in July and Lynn’s Local 201 branch members threatened to strike.
