GE Aerospace Pension Plan

Traditional salaried formula: years of service (typically capped at 30) multiplied by the average of the highest 60 consecutive months of eligible compensation, multiplied by an accrual rate of approximately 1.5% to 2.0% per year of service depending on hire cohort. Employees who joined on or after January 1, 2011 (but before the December 31, 2011 plan closure) may hold a Personal Pension Account (PPA), a cash-balance-style sub-account receiving annual pay credits of 3% to 6% of salary and interest credits indexed to the 30-year U.S. Treasury rate. Benefit accruals froze December 31, 2020 for virtually all participants; preserved accrued benefits are payable under the participant's distribution elections at retirement.

This is general educational information about how the plan's formula works, not a calculation of your individual benefit. Your actual benefit depends on your service, pay history, and the plan terms in effect during your employment.

Closed to new entrants effective January 1, 2012 (employees hired on or after that date are ineligible for the traditional plan). GE announced in October 2019 that benefit accruals for approximately 20,000 remaining active U.S. salaried employees would freeze effective December 31, 2020 (no new accruals from January 1, 2021 onward). Supplementary pension benefits for approximately 700 executive-level employees were frozen concurrently. Collectively-bargained (union/hourly) employees are governed by the accrual provisions of their individual CBAs; the hard freeze applies primarily to the salaried population. All accrued benefits earned through December 31, 2020 are preserved.

A frozen pension does not disappear. Benefits already earned are generally protected and continue to be paid under the plan's terms. A freeze changes whether new benefits accrue going forward, not whether existing benefits are honored.

On December 15, 2020, GE purchased group annuity contracts from subsidiaries of Athene Holding Ltd., transferring approximately $1.7 billion in U.S. GE Pension Plan obligations. Approximately 70,000 retirees and beneficiaries receiving monthly benefits below $360 were moved to Athene's coverage, funded entirely from existing plan assets with no additional company cash contribution. Monthly benefit amounts were unchanged. A proposed class-action lawsuit was later filed alleging the transfer exposed participants to increased risk due to Athene's ownership structure. Separately, GE offered a voluntary lump-sum window to approximately 100,000 deferred-vested former employees in late 2019; that was a one-time offer, not a group-annuity PRT.

In a pension risk transfer (PRT), an employer transfers some or all of its pension obligations to an insurance company through a group annuity contract. If your benefit was transferred, your monthly payment generally stays the same, but the company paying it changes, and PBGC insurance is replaced by state insurance guaranty association coverage. For this plan, the counterparty was Athene Annuity and Life Company (subsidiary of Athene Holding Ltd.) (2020).

GE split into three companies in 2024. Which company is now responsible for my pension?

GE Aerospace (NYSE: GE) retained the principal U.S. GE Pension Plan, now called the GE Aerospace Pension Plan (EIN 14-0689340). GE Vernova and GE HealthCare assumed allocated portions of pension obligations for employees who transferred to those entities, but the primary defined-benefit plan covering the bulk of the 121,730 Form 5500 participants remains with GE Aerospace. Plan administration is handled by Fidelity Investments.

Are pension benefits still accruing for GE Aerospace employees?

No, for the vast majority of participants. GE froze benefit accruals for salaried and most U.S. employees effective December 31, 2020. Benefits earned through that date are preserved and will be paid at retirement. Employees hired after December 31, 2011 were never eligible for the traditional pension plan. Certain collectively-bargained employees may have separate accrual provisions in their union contracts, but the salaried defined-benefit plan is fully hard-frozen.

What distribution options does the GE Aerospace pension offer?

The traditional defined-benefit pension generally pays as a monthly annuity. Available forms include a single-life annuity, 50%/75%/100% joint-and-survivor annuities, and a 5-year certain-and-life option. The Personal Pension Account (PPA) and Voluntary Pension Account (VPA) cash-balance-style sub-accounts can typically be distributed as a lump sum or rolled over to an IRA. Contact Fidelity to confirm your specific options based on your account type.

Is my GE Aerospace pension protected by the PBGC?

Most single-employer defined benefit pensions are insured by the Pension Benefit Guaranty Corporation (PBGC), a federal agency. If a covered plan terminates without enough money to pay promised benefits, the PBGC pays benefits up to a legal maximum that varies by age. Benefits that have been transferred to an insurance company through a pension risk transfer are no longer PBGC insured and are instead backed by state guaranty associations.

Should I take my GE Aerospace pension as a lump sum or an annuity?

There is no single right answer. The decision depends on your health and life expectancy, your other retirement assets, whether you need to provide for a survivor, and the interest rate environment that sets the lump sum value. Our lump sum versus annuity guide walks through the trade-offs in detail.