GE announced that as part of its continued actions to solidify its financial position, it is proposing to freeze the accrual of pension benefits for approximately 2,800 employees in its defined benefit pension plans in the United Kingdom. A 60-day consultation process with plan members will begin in February.
If implemented, the proposals would impact all members of the GE Pension Plan and the GEAPS (2006 Section) in the U.K. and come into effect January 1, 2022. Affected employees would be automatically enrolled into GE’s existing defined contribution scheme, and the company is proposing a temporary increase to the default 10-percent employer contribution by 2 percent for the first two years. There would be no change for GE retirees already collecting pension benefits, and no change to existing benefits accrued by active members through December 31, 2021.
GE Chief Human Resources Officer Kevin Cox said, “The proposed changes to our U.K. defined benefit pension offerings are difficult but necessary as we continue our work to accelerate GE's transformation. We are actively managing GE’s pension obligation by considering market trends and employee impact while thoughtfully balancing our company priority to solidify our financial position.”
GE’s pension benefit obligation in the U.K. was approximately $14 billion at the end of 2020, and the proposals would further GE’s objectives of actively managing pension costs and risks. GE has taken a series of actions in recent years to manage its pension obligation and deficit on multiple fronts, including by freezing the U.S. GE Pension Plan (GEPP) and U.S. Supplementary Pension (SPP) for salaried participants and offering a limited one-time lump sum payout to eligible former employees.
In addition, in December, GE voluntarily pre-funded its estimated minimum ERISA GE Pension Plan funding requirements for 2021, 2022, and into 2023 to help support meeting commitments to employees in the future. GE also transferred some U.S. GE Pension Plan obligations by purchasing group annuity contracts from Athene. The GE Pension Plan has been closed to new entrants since September 2011.