The San Francisco-based bank is combining its existing program with that of Wachovia Corp., which it acquired in December, and freezing both companies’ cash balance plans, the news report added.
“We must manage expenses prudently to help Wells Fargo continue our long track record of profitable growth so have decided to have one team member retirement plan for the combined company,” spokesman Chris Hammond said in a statement, according to the news report. “These decisions were difficult and we are confident that we’re taking the right steps to ensure the long-term strength of our company.”
Hammond said the bank will maintain the dollar-for-dollar match up to 6% of pay deferred by employees for its 401(k) plan.
Late last month, Wells Fargo reported that the Wachovia takeover and surging deposits propelled first-quarter net income to $3.05 billion, up 52% from a year earlier, but the company’s capital levels have been stretched by acquisition costs, credit write-downs and increased lending, the Chronicle said. There have been reports that regulators may force the bank to raise additional capital to protect against potential future losses, after government stress tests concluded Wells Fargo would struggle to survive a deeper recession.
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