GE “Profits” from 1996
Retirees’ Increase
§ November 1, 1996, GE grants increase to retirees at a
cost of about $100 million.
§ Under accounting rules, this “significant event” to the
Plan allows GE to restate the discount rate and apply
the new rate to the Plan for the entire year of 1996.
§ GE raises the discount rate and reduces its liabilities
by about $200 million, for a “net profit” of $100 million.
§ GE takes credit for and receives public relations
plaudits for the increase.
§ Will history repeat itself in 2000?