Accounting International Marketable Securities Standard

In GE's defense, its retirement plan is substantially better than those offered by many other companies, especially in this 21st century of uncertainty and frequent career changes. Health insurance, for example, is provided at a comprehensive level for all employees who have worked for 10 or more years. This means that even if a retiree has to work part-time or use a private retirement account, a huge part of their expenses are covered by GE.

Benefits for GE

The pension plan also works well for GE. Since 1987, it has been completely funded by employee contributions--matching funds are no longer part of the equation. GE also is able to use the profits from the pension fund as profits on their balance sheet, even though these profits are spoken for, unable to be accessed by GE management, and indeed not even paid in by GE, they still swell the bottom line and therefore make GE look more attractive to stakeholders, which in turn bolsters its price on the stock market.

Inflation Problems for GE Retirees

A major problem with the retirement scheme is the fact that it has no caveats for regular increases, not even to keep up with inflation. What this means is that while the dollar figure of the payments doesn't change, the value of those payments goes down as inflation goes up. This is a big deal, especially as life expectancies rise. If someone retires at 65, she often an expect to live another 20 years, and 20 years of inflation drastically reduces the value of a fixed monthly payment.

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