General Electric is freezing the pension plans for about 20,000 of its workers and offering pension buyouts to another 100,000 former employees as it attempts to slash debt.
The freeze, which becomes effective January 1, 2021, means that current employees covered by the pension plan will not see an increase in their pension payments even if they continue to work at the company. The company stopped allowing new employees to enter the pension plan in 2012.
In a statement Monday, the Boston-based company said there is no change for GE retirees already collecting pension benefits or employees with production benefits.
GE said its actions would trim its pension deficit by about $5 billion to $8 billion, and reduce its overall debt by about $4 billion to $6 billion.
The industrial conglomerate has been selling off assets and streamlining its operations amid sagging profits and other negative developments in recent years, and clearing debt has become a priority for CEO Larry Culp.
The move to freeze pensions comes in a tough year for the company. In February 2019, GE scaled back plans for its new headquarters and promised to return $87 million in state incentives it received as an enticement to move to Boston in 2016. In August, the company's finances received additional scrutiny after Harry Markopolos, the whistleblower in the Bernard Madoff fraud, released a report alleging that GE was covering up its financial troubles. GE called the report "meritless."
WBUR's Adrian Ma contributed to this report, which includes information from The Associated Press.