Ultimate health care cost trend rate

  


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| FUNDING STATUS BY PLAN TYPE | Benefit Obligation |  | Fair Value of Assets |  | Deficit/(Surplus) |
|  | 2021 | 2020 |  | 2021 | 2020 |  | 2021 | 2020 |
| Principal Pension Plans: |  |  |  |  |  |  |  |  |
| GE Pension Plan (subject to regulatory funding) | $ | 65,073  |  | $ | 68,945  |  |  | $ | 60,990  |  | $ | 58,843  |  |  | $ | 4,083  |  | $ | 10,102  |  |
| GE Supplementary Pension Plan (not subject to regulatory funding) | 7,226  |  | 7,353  |  |  | —  |  | —  |  |  | 7,226  |  | 7,353  |  |
|      | 72,299  |  | 76,298  |  |  | 60,990  |  | 58,843  |  |  | 11,309  |  | 17,455  |  |
| Other Pension Plans: |  |  |  |  |  |  |  |  |
| Subject to regulatory funding | 19,698  |  | 21,793  |  |  | 22,280  |  | 21,283  |  |  | (2,582) |  | 510  |  |
| Not subject to regulatory funding | 2,558  |  | 2,865  |  |  | 210  |  | 223  |  |  | 2,348  |  | 2,642  |  |
| Principal retiree benefit plans (not subject to regulatory funding) | 4,308  |  | 5,019  |  |  | 42  |  | 134  |  |  | 4,266  |  | 4,885  |  |
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| Total plans subject to regulatory funding | 84,771  |  | 90,738  |  |  | 83,270  |  | 80,126  |  |  | 1,501  |  | 10,612  |  |
| Total plans not subject to regulatory funding | 14,092  |  | 15,237  |  |  | 252  |  | 357  |  |  | 13,840  |  | 14,880  |  |
| Total plans  | $ | 98,863  |  | $ | 105,975  |  |  | $ | 83,522  |  | $ | 80,483  |  |  | $ | 15,341  |  | $ | 25,492  |  |

  
FUNDING. The Employee Retirement Income Security Act (ERISA) determines minimum pension funding requirements in the U.S. In December 2020, we made a discretionary contribution of $2,500 million to the GE Pension Plan. No additional contributions were required or made during 2021 and based on our current assumptions, we do not anticipate having to make additional required contributions to the plan in the near future. On an ERISA basis, our estimate is that the GE Pension Plan was 107% and 94% funded at January 1, 2022 and 2021 respectively. The ERISA funded status is higher than the GAAP funded status (94% and 85% funded for 2021 and 2020 respectively) primarily because the ERISA prescribed interest rate for determining liabilities is calculated using a long-term average interest rate.   
We expect to pay approximately $350 million for benefit payments under our GE Supplementary Pension Plan and administrative expenses of our principal pension plans and expect to contribute approximately $175 million to other pension plans in 2022. We fund retiree health benefits on a pay-as-you-go basis and the retiree life insurance trust at our discretion. We expect to contribute approximately $380 million in 2022 to fund such benefits.   
ACTIONS. We announced that pension benefits for approximately 2,700 United Kingdom (UK) participants will be frozen effective January 1, 2022. We also announced that pension benefits for approximately 800 Canadian participants will be frozen effective December 31, 2023. These transactions are reflected as a curtailment loss in 2021. In December 2020, we transferred obligations of $1,706 million from the GE Pension Plan, representing the benefits of approximately 70,000 of GE’s retirees and beneficiaries, to a third-party insurance company by irrevocably committing to purchase group annuity contracts. The transaction was funded directly by the assets of the plan and is reflected as a settlement.  


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| COST OF OUR BENEFITS PLANS | 2021 |  | 2020 |  | 2019 |
| AND ASSUMPTIONS | Principal pension  | Other pension  | Principal retiree benefit  |  | Principal pension  | Other pension  | Principal retiree benefit  |  | Principal pension  | Other pension  | Principal retiree benefit  |
| Components of expense (income) |  |  |  |  |  |  |  |  |  |  |  |
| Service cost - operating | $ | 237  |  | $ | 233  |  | $ | 44  |  |  | $ | 657  |  | $ | 243  |  | $ | 59  |  |  | $ | 654  |  | $ | 246  |  | $ | 58  |  |
| Interest cost | 1,951  |  | 383  |  | 103  |  |  | 2,350  |  | 422  |  | 150  |  |  | 2,780  |  | 542  |  | 202  |  |
| Expected return on plan assets | (3,049) |  | (1,194) |  | —  |  |  | (2,993) |  | (1,082) |  | (11) |  |  | (3,428) |  | (1,144) |  | (21) |  |
| Amortization of net loss (gain) | 3,483  |  | 403  |  | (79) |  |  | 3,399  |  | 434  |  | (82) |  |  | 3,439  |  | 319  |  | (118) |  |
| Amortization of prior service cost (credit) | 28  |  | (3) |  | (236) |  |  | 146  |  | 1  |  | (234) |  |  | 135  |  | 3  |  | (232) |  |
| Curtailment / settlement loss (gain) | —  |  | 76  |  | —  |  |  | —  |  | 12  |  | —  |  |  | 349  |  | 13  |  | (38) |  |
| Non-operating | $ | 2,413  |  | $ | (335) |  | $ | (212) |  |  | $ | 2,902  |  | $ | (213) |  | $ | (177) |  |  | $ | 3,275  |  | $ | (267) |  | $ | (207) |  |
| Net periodic expense (income) | $ | 2,650  |  | $ | (102) |  | $ | (168) |  |  | $ | 3,559  |  | $ | 30  |  | $ | (118) |  |  | $ | 3,929  |  | $ | (21) |  | $ | (149) |  |
| Weighted-average benefit obligations assumptions |  |  |  |  |  |  |  |  |  |  |  |
| Discount rate | 2.94  | % | 1.93  | % | 2.64  | % |  | 2.61  | % | 1.44  | % | 2.15  | % |  | 3.36  | % | 1.97  | % | 3.05  | % |
| Compensation increases | 3.05  |  | 2.35  |  | 2.63  |  |  | 2.95  |  | 3.06  |  | 2.82  |  |  | 2.95  |  | 3.16  |  | 3.75  |  |
| Initial healthcare trend rate(a) | N/A | N/A | 5.70  |  |  | N/A | N/A | 5.90  |  |  | N/A | N/A | 5.90  |  |
| Weighted-average benefit cost assumptions |  |  |  |  |  |  |  |  |  |  |  |
| Discount rate(b) | 2.61  |  | 1.44  |  | 2.15  |  |  | 3.36  |  | 1.97  |  | 3.05  |  |  | 4.07  |  | 2.75  |  | 4.12  |  |
| Expected rate of return on plan assets | 6.25  |  | 5.69  |  | 1.25  |  |  | 6.25  |  | 6.10  |  | 7.00  |  |  | 6.75  |  | 6.76  |  | 7.00  |  |

(a) For 2021, ultimately declining to 5% for 2030 and thereafter. (b) Weighted average 2019 discount rate for principal pension was 4.07%. Discount rate was 4.34% for January 1, 2019 through September 30, 2019 and then changed to 3.24% for the remainder of 2019 due to the remeasurement of the plans.  
2021 FORM 10-K 67
