General Electric (GE) recently announced they had frozen their defined benefit plan and were offering lump-sum pension payouts to about 100,000 retirees. GE will also discontinue making pension contributions after 2021. This follows a similar action by Ford to freeze their defined benefit pension for their retirees. A Ford executive recently commented that although they no longer actively report internally on these figures, over the last few years, the take-up rate for a lump sum payment would bounce around between a third to a half. The recent average hovers around 40%. As pension liabilities loom, coupled with relaxed rules from the IRS on pension freezes, many more companies will likely freeze existing pensions and offer lump sums.

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