“Employers are looking at the total compensation package. Better retirement benefits can result in a lifetime commitment on the part of employees – which benefits the bank, not just in cost savings, but also in continuity of relationships with their community, which is their single most important differentiating quality,” notes Ken Montgomery, President of Pentegra, in a press release.
The survey found that 4.2% of banks froze their defined benefit plans in 2003, compared to a 9.4% rate for all employers, according to the release. In 2004, 6.9% of banks froze their DB plans, compared to 11% for all employers.
As for generosity of benefits, banks score better in:
- average pension accrual rate (1.75% for banks versus 1.5% for all employers),
- average number of years of final salary used to calculate a participant’s pension benefit (3 or 5 v. 6),
- subsidized early retirement, and
- lump sum distribution options.
The survey was based on a database of 259 bank defined benefit (DB) plans managed by Pentegra Retirement Services. More information about Pentegra can be found at www.pentegra.com .