Around 2,800 workers at industrial conglomerate General Electric (GE) are facing a “huge financial hit” under proposals to close the group's defined benefit (DB) final salary pension schemes, Unite Union has warned.

The plans would see the GE Pension Plan and the GEAPS DB pension schemes close from 1 January 2022, with members moved to GE’s existing defined contribution (DC) scheme, which Unite said was “at the mercy of fluctuations” in the global stock markets.

GE has also proposed a temporary increase to the default 10 per cent employer contribution by 2 per cent for the first two years, as well as clarifying that there would be no change for GE retirees already collecting pension benefits, and no change to existing benefits accrued by active members through December 31, 2021.

The conglomerate has confirmed that a 60-day consultation process with plan members will being on 4 February 2021.

However, Unite has described the plans as a “financial torpedo” to the retirement income of the nearly 3,000 workers, who it stressed had shown “an incredible amount of dedication” in keeping GE businesses running smoothly during the pandemic.

It also said that the “salami slicing” of members pensions and "sweeping job cuts" that have been seen amid the pandemic stood in contrast to the $46.5m bonus secured by GE’s US chief executive, Larry Culp.

As such, it has written to GE’s UK CEO, Kevin O’Neill, calling for consultations to take place at a national level, ahead of the 9 April deadline, on how to best deal with the issue in “the most organised and coherent manner possible”, and stating that any consultation should last longer than 60 days, if needed.

In the letter, Unite national officer, Linda McCulloch, said: “Unite members and the wider GE workforce have shown an incredible amount of dedication and commitment to keep their businesses going during the pandemic, and that the sweeping job cuts and restructurings in a number of areas have already hit many people very hard indeed.

“To now be faced with extremely significant changes to their pension provisions will doubtless come as another hard blow in the middle of what is already an incredibly difficult situation.”

Unite national officer, Rhys McCarthy, added: “As these pension proposals are a financial torpedo and the difference between our members having a comfortable retirement or one wracked by money worries, we want the most extensive negotiations for the reasoning behind these plans as workers face a huge financial hit.”

However, GE has argued that the proposals would further its objectives of actively managing pension costs and risks, confirming that its pension benefit obligation in the UK was estimated to be $14bn at the end of 2020.

It emphasised that it has already taken a series of actions in recent years to manage its pension obligations, including freezing the US GEPP and the US Supplementary Pension (SPP) for salaried participants.

GE chief human resources officer, Kevin Cox, commented: “The proposed changes to our UK DB pension offerings are difficult but necessary as we continue our work to accelerate GE's transformation.

"We are actively managing GE’s pension obligation by considering market trends and employee impact while thoughtfully balancing our company priority to solidify our financial position.”

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