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GE Pension Fund Story: Workers Pay, GE Benefits At the end of 2006, the GE Pension Plan covered 530,000 total participants: Of these 135,000 are active employees; 185,000 are former employees with vested rights to future benefits, and 210,000 are retirees and beneficiaries receiving benefits. The GE Pension Plan is funded to 126% of its liabilities: The actuarial projection of the GE Pension Plan's total benefit liability as of December 31, 2006, was $43.293 billion. The Plan Trust contains assets of $54.758 billion to cover this liability - $11.465 billion more than needed to meet its projected obligations.  When you look at the amount of assets that exceed obligations - a figure GE cites to its employees - the number balloons to an overfunding of $16.621 billion. Employees Contribute, GE gets a free ride: GE has made no contributions to the Pension Trust since 1987. Yet, employees are required to contribute 3% of their pay above $50,000 every year. (2003 negotiations raised the threshold from $37,500.) Employee contributions have totaled more than $1 billion since 1988. While employee contributions accumulate in each worker's so-called "Personal Pension Account" which provides a supplemental benefit at retirement, they are merged with the rest of the pension trust fund. Employee accounts grow with market interest rates, though still at a rate lower than the average rate of return that the GE Pension Trust has earned on its investments over the years.  As of 2007, GE pays 5.51% on the PPA. In contrast, the deferred compensation plan for the top 4,000 executives pays 8.5% to 14%. Retirees lose ground to inflation every day: The GE Pension Plan does not have an automatic mechanism to provide for cost of living adjustments to keep pace with inflation. For the first time ever, the Company agreed to bargain over pension benefits in 2003, and IUE-CWA and GE agreed to a 13th month pension check for retirees, paid in December 2003.  IUE-CWA fought hard to get that 13th check. Yet, a bonus does not figure into a retiree's permanent pension. GE's last permanent adjustment to pension benefits for those already retired came in April 2000. GE's press release at the time claimed that those who retired before 1986 would receive increases of from 15 to 35%. Since 1985, prices have risen over 87%. Those who retired after June 1997 received no increase in 2000. Since that year, the cost of living has increased by 17%. Pension benefits now replace 32% of a retiring worker's annual wages: After 2003 negotiations, the Plan guarantees a worker, retiring after 30 years of work, a pension minimum of $990 per month - which replaces roughly 32% of final year's wages. GE top executives do well in contrast: The top 4,000 GE executives can participate in the GE Supplementary Pension Plan as well as the GE Excess Benefits Plan. The SPP pays up to 70% of an executive's average annual compensation based on his or her highest 36 consecutive months of compensation. The percentage of pay that is replaced is considerably higher for those in the SPP than for non-executive employees who are not. Executive retirement plans aggravate the great disparities in compensation that now exist between the current senior executives of GE and the active lower-level employees far into their retirement years. In compliance with Securities and Exchange Commission disclosure requirements, companies must now account for the present value of accumulated retirement benefits for the named executive officers in the Proxy Statement. The 2007 Proxy calculates the present value of pension plans for the five named executive officers as follows: Name Plan Name Years of  Credited Service Present Value Jeffrey R. Immelt GE Pension Plan 24.532 $651,208   GE Supplementary Pension Plan 24.532 $23,282,637   GE Excess Benefits Plant 24.532 885   TOTAL 24.532 $23,934,730 Keith S. Sherin GE Pension Plan 25.425 516,308   GE Supplementary Pension Plan 25.425 8,799,867   GE Excess Benefits Plant 25.425 0   TOTAL 25.425 $9,316,175 Michael A. Neal GE Pension Plan 27.233 $850,813   GE Supplementary Pension Plan 27.233 $15,957,731   GE Excess Benefits Plant 27.233 $3,302   TOTAL 27.233 $16,811,846 John G. Rice GE Pension Plan 28.39 $619,785   GE Supplementary Pension Plan 28.39 11,450,622   GE Excess Benefits Plant 28.39 0   TOTAL 28.39 $12,070,407 Robert C. Wright GE Pension Plan 31.659 $1,395.952   GE Supplementary Pension Plan 37.984 $59,221,042   GE Excess Benefits Plant 31.659 $247,263   TOTAL 31.659 – 37.984 $60,864,257 Thus, Mr. Wright has stockpiled over $60.8 million of retirement benefits. In addition, just the 2006 earnings on Mr. Wrights deferred salary, deferred bonus, and deferred long-term pay came to another $3.7 million. (This is just the earnings from the above-market interest rates referred to above.) That total of $64.5 million is more than 2,239 times what a GE worker with wages at the top step of the guaranteed table would receive retiring after a 40-year career. GE's Pension Plan pumps up the Company's bottom line: Accounting rules enable GE to take advantage of pension fund surpluses in calculating its profits. The GE Pension Plan added $877 million to the Company's net income for 2006.  Since 1990, this "pension income" has amounted to $14.2 billion. The Company gives long-term compensation awards to its senior executives (not including the CEO) based in part on profits pumped up by the Pension Plan. General Electric: In 2006, GE had revenues of $163.4 billion - greater than the GDP of more than 80% of the member states of the United Nations. In 2006, GE net after-tax profits were $20.8 billion. Based on stock prices in March 2007, GE's market capitalization (total stock value) stood at $365.9 billion. GE has eliminated more than 150,000 jobs in the United States, over the last 15 years. Over the same period, GE has received billions of dollars in federal contracts and millions more in tax subsidies from state and local governments around the country.