GE freezes pension plans in a bid to cut debt
General Electric announced a plan to freeze the pensions of 20,000 U.S. salaried workers in order to reduce its pension deficit and trim debt.
The move aimed at cutting debt and reducing its retirement fund deficit by up to $8 billion
Stocks impacted: General Electric Co (GE)
The move will shave the company’s pension deficit by $8 billion and its net debt by as much as $6 billion. GE and its finance arm had total borrowings of about $105.8 billion as of June 30, with industrial net debt at $54.4 billion. The company said it will also freeze supplementary pension benefits for about 700 U.S. employees who became executives before 2011. The freeze is effective Jan. 1, 2021, and both moves are expected to help lower net debt between $4 billion and $6 billion. GE’s shares were down 0.12% at $8.56 on Monday.
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