PensionsAugust 14, 2024

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.

Reported 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.

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.”