PhotoGeneral Electric announced on Monday that it’s freezing pension plans for approximately 20,000 employees in an effort to reduce both its debt and its staggering pension deficit. 

Chief Executive Officer Larry Culp, who has been striving to put the company on more solid footing since stepping into the position a year ago, said the plan unveiled Monday will reduce the company’s pension deficit by up to $8 billion. 

The Boston-based company’s pension deficit ranks among the worst in corporate America, according to Bloomberg. Both cuts are expected to help lower the company’s net debt between $4 billion and $6 billion.

The company said 20,000 of its salaried employees will stop accruing new benefits starting in 2021. About 700 employees in a supplementary plan will also be affected. 

GE said it will contribute 3 percent of eligible compensation to a 401(k) plan and will provide matching contributions of 50 percent on as much as 8 percent of eligible compensation. Additionally, the company will be offering a limited time lump-sum payment option to about 100,000 eligible former employees who have not started their monthly U.S. GE Pension Plan payments. 

“Returning GE to a position of strength has required us to make several difficult decisions, and today’s decision to freeze the pension is no exception,” Kevin Cox, chief human resources officer at GE, said in a statement

“We carefully weighed market trends and our strategic priority to improve our financial position with the impact to our employees. We are committed to helping our employees through this transition.”

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