Home > News > Pensions > GE Retirees Strike Deal to Increase Time Limit to Sue Over Unpaid Pension Benefits
Pensions

GE Retirees Strike Deal to Increase Time Limit to Sue Over Unpaid Pension Benefits

Participants had filed an administrative complaint alleging the company renounced its obligation to pay their benefits.

By Michael Katz

Following negotiations with General Electric Co., now known as GE Aerospace, participants in pension plans formerly sponsored by GE have struck a deal that increases the time they have to file a lawsuit if their pension benefits are not paid in full.

In 2020, GE reduced to one year the amount of time during which participants in the GE Supplementary Pension Plan, the largest of its pension programs, can sue to maintain their pension benefits. GE then announced plans in 2021 to spin off two units into GE HealthCare Technologies Inc. and GE Vernova Inc. (the legacy energy business) while rebranding the original company to GE Aerospace. One year later, in 2022, it transferred the supplementary pension benefits for more than 1,000 current and former GE employees to the smaller, spun-off companies.

According to law firm Engstrom Lee, which represented the plan participants in the negotiations, GE  informed the participants that GE was no longer responsible for paying their benefits, even if the new companies failed to pay in the future.

Concerned that the spun-off companies might not be able to pay their guaranteed pension benefits, the participants filed an administrative complaint against GE, alleging that the company had violated federal law by renouncing its obligation to pay their benefits if GE HealthCare and GE Vernova were unable to cover them.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news.

Under the terms of the agreement between GE and the plan participants, the one-year deadline to file a claim does not start until participants are told they will not be receiving the full amount of their plan benefit or until 90 days after a benefit payment goes unpaid. It also clarifies that participants whose benefits were transferred to the spun-off entities do not agree that GE does not need to cover their benefits.

“After serving GE for nearly 30 years, forgoing other opportunities for the promise of my supplementary pension benefits, I was concerned that my benefits were no longer secure,” said Brian Davies, one of the GE retirees involved in the negotiations, in a statement. “I am relieved that GE has agreed to preserve our ability to enforce our legal rights to protect my family’s financial security in retirement.”

Related Stories:

General Electric Proposes Freezing UK Pension Plans

New General Electric CIO Freezes Pension Fund

Chaudhari Leaves IBM for General Electric CIO Job

Tags: , , , , , , ,

Home > News > Risk > Lower Inflation Should Herald Higher Stock Prices Ahead, Strategists Say
Risk

Lower Inflation Should Herald Higher Stock Prices Ahead, Strategists Say

The market does get cases of the heebie-jeebies, but in recent times, these have been temporary.

By Larry Light

Could stocks be headed for a lot more upside? Assuming there is no recession, and interest rates drop as forecast, a lot of strategists think the answer is yes.

Seemingly everyone is convinced that the Federal Reserve will lower rates at its September 18 meeting. The CME Group’s FedWatch tool, based on a survey of interest rate traders, gives odds of 53.5% that the Fed’s policymaking committee will cut the body’s short-term fund rate by one-quarter of a percentage point, to a band between 4.75% and 5.0%.

The stock market could not be happier, advancing 1.7% Tuesday—part of an August reversal from the mini-slump that began in mid-July. Recall that the Fed’s early-2022 decision to hike rates, aimed at combating then-resurgent inflation, led to a year-long dive in 2022 (when the S&P 500 lost 18%). After that, the market resumed its upward path. Now inflation is ebbing, and expectations are strong that Wednesday’s Consumer Price Index announcement for July will continue to soften.

According to FactSet, the CPI likely rose on a monthly basis by 0.2% in July after falling 0.1% in June. The new report is “going to be bringing more evidence that the disinflation process continues and remains on track,” says Lydia Boussour, a senior economist at EY-Parthenon, told Morningstar. That development, she added, “will reinforce the case for a Fed rate cut at the September meeting.”

For more stories like this, sign up for the CIO Alert newsletter.

The periodic downturns, in fact, are too often the result of jumpy traders who fail to look at the broader picture, in the view of Jeremy Grantham, co-founder of investment firm GMO, in remarks to Barron’s. Coming from Grantham, a long-time bear, this is a telling observation. To Grantham, investors are overreacting to the stock market’s high valuation. The S&P 500’s price/earnings ratio is 23, about seven points higher than its average.

The promise of continued runway for tech stocks burns brightly to folks like Grantham, especially the latest tech iteration, artificial intelligence.

But even if the steady march up comes true, the occasional pullback is to be expected. Adam Turnquist, chief technical strategist at LPL Financial, wrote in a recent commentary that market downturns are similar to “a stubbed toe:” a temporary pain. Since 1928, per a Ritholtz Wealth Management study, 94% of years have had a drawdown of 5% or worse.

Still, today’s bearish qualms—a heated presidential contest, wars in Gaza and Ukraine, memories of recent inflation—make the investing public wary. The VIX index, which measures investor anxiety, spiked to 35 a week ago, amid a weak jobs report, but quickly settled back to 18, only slightly higher than it has been for the last couple of years.

 

Tags: , , , , , , ,

«