The Atlanta-based bank company revealed in a Securities and Exchange Commission (SEC) regulatory filing that it would discontinue its subsidy of medical coverage for retirees unless they are at least 65 years old and have 10 years of service before January 1, 2010.
The company also announced in the SEC document that, as of December 31, 2007, employees would no longer accrue pension benefits under the SunTrust Retirement Plan and that accrued benefits would be frozen.
As of January 1, 2008, participants with fewer than 20 years of service and new participants will accrue future pension benefits under a cash balance formula. Those with 20 or more years of service as of December 31, 2007 will be able to choose between the traditional pension and the cash balance program.
Also, SunTrust said, it is changing the pension vesting schedule as of January 1, 2008, from the current five-year cliff to a three-year cliff.
Finally, e ffective January 1, 2008, SunTrust will beef up its 401(k) match to 100% of the first 5% of pay. This change will also affect company executives who are participants, the company said.
The company said in the SEC filling that “this action was taken, in part, to make the retirement program financially sustainable over the long term by stabilizing the volatility of the pension expense while providing a program of value to employees that will enhance the company’s competitiveness in the marketplace.”
SunTrust , with total assets of $182.2 billion as of December 31, 2006, operates 1,701 retail branches in Alabama, Arkansas, Florida, Georgia, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia, and the District of Columbia.
More information about the company is at www.suntrust.com .