GE Stock Raises 3% After It Freezes Pension of 20,000 Employees
General Electric said on Monday that it plans to freeze pension benefits for about 20,000 employees in an attempt to reduce its debt pile and improve its balance sheet. The company said it expects the effort to shrink its pension deficit by $5-8 billion and reduce its net debt by $4-6 billion. Shares rose as much as 3% on the news.
"Returning GE to a position of strength has required us to make several difficult decisions, and today's decision to freeze the pension is no exception," said Chief Human Resources Officer Kevin Cox.
GE had a total of around $105.8 billion in debt as of June 30, according to the company's second-quarter earnings report.
About 100,000 former GE employees who haven't started receiving pension benefits will also be offered a limited time lump-sum payment and GE will also freezing US supplementary pension benefits for about 700 employees.