SunTrust Bank Freezes Employee Pensions

SunTrust Bank is the latest large company to announce that it is freezing its employee pension plan in a cost-cutting move.

A spokesman for the Atlanta-based bank told the Atlanta Journal-Constitution that the move will help stabilize the retirement system.

The freeze will take effect at the end of the year. Beginning in January, the company will increase its matching contribution to the employee 401(k) plan from 5 percnt to 6 percent.

An increasing number of companies have abandoned traditional pension plans for 401(k) programs.

“Since late 2005, we’ve seen a disturbing trend of healthy companies freezing their traditional pension plans and moving only to a 401(k),” says Nancy Hwa, a spokeswoman for the Pension Rights Center, a retirement security advocacy group, told the AJC.