GE has no problem paying its CEO handsomely. But when it comes to workers, many are left out in the cold.
“General Electric is pulling the plug on its pension plan, and that’s a surefire way to derail workers’ retirement planning.
GE announced on Monday it was freezing pensions for 20,000 employees with salaried benefits in an attempt to reduce its $8 billion pension deficit, and that it would also freeze supplementary pension benefits for about 700 workers. Current retirees already receiving their pension payments will not be affected and no new hires have been enrolled in the pension plan since 2012.
When a pension is frozen, it is no longer earning benefits, but it is still federally insured and employees do receive whatever amount of money was already accrued. Still, it means potential earnings are lost and workers must scramble to create a plan to ensure they have enough money in the future for their retirements (usually by saving their own dollars, as opposed to relying on their company to do so).
‘Every time we see someone lose a defined-benefit plan, we see that they’ve lost all of the sacrifices they’ve made,’ Teresa Ghilarducci, a labor economist and director of The New School’s Schwartz Center for Economic Policy Analysis. ‘Almost all workers in defined-benefit plans have given up a lot of raises in the past so not only do they lose a secure income for the rest of their lives — they also lost all of those past wages they’ll never get back.'”
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