GE Faces $31 Billion Pension ‘Nightmare’: Report

FAIRFIELD, CT — On the heels of reports that General Electric could break up as its stocks continue to plummet, the former Fairfield-based company has a $31 billion pension “nightmare,” according to CNN Money.

Matt Egan of CNN Money writes that GE’s “pension nightmare is the result of years of inattention, and of historically low interest rates that have driven up pension liabilities around the world.” GE’s pension deficit is the largest among S&P 500 companies and is $11 billion worse than the next closest company, Egan reports.

After calling Fairfield home for 42 years, GE was lured to Massachusetts with about $150 million in tax breaks and incentives in early 2016. Ever since then, it's been bad news for the multinational conglomerate, which has seen a shared drop of about 42 percent over the past year.

The company’s stocks plummeted last week after CEO John Flannery said the newly Boston-based company is taking a fresh look its structure, which could involve major GE divisions becoming separately traded units.

Flannery, who took over for longtime CEO Jeff Immelt who retired last year, envisions a slimmer GE focusing on energy, aviation, and health care divisions. Other divisions spinning out on their own, it's argued, would be more manageable.

GE said in November that 2018 would be a "reset" year after announcing its quarterly dividend was being cut from 24 cents to 12 starting in December. You can read GE's full turnaround plan here.

CNN Money reports GE’s pension shortfall is vastly different than when Immelt replaced Jack Welch as CEO and the company had a $14.6 billion budget surplus in 2001.

Read the full CNN Money report here.

With reporting by Mike Carraggi, Patch National Staff