Huntington Bancshares freezes pension plan
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Huntington Bancshares Inc. is freezing its defined benefit pension plan, completing a process it began in 2009.
Effective Jan. 1, 2014, current plan participants no longer will earn benefits in the plan, which already was closed to employees hired after Dec. 31, 2009. Less than half of the company's 12,000 employees are enrolled in the plan.
“Pension plans of companies across the country have become significant liabilities. We recognized this trend in 2009, which is why we stopped enrolling new hire colleagues into the pension plan, shifting instead to 401(k) offerings,” a spokeswoman for Columbus, Ohio-based Huntington Bancshares said in an email. “By now winding down our pension program, we are joining the ranks of most publicly traded companies, including most financial institutions.”
Other major banks that have frozen their pension plans in recent years include Bank of America Corp. and Wells Fargo & Co.
Huntington Bancshares' pension plan was significantly underfunded at the end of last year. According to a U.S. Securities and Exchange Commission filing, the plan had projected benefit obligations of $783.8 million at the end of 2012 and $633.6 million in assets.
Huntington said it will continue to match 100% of employees' 401(k) plan contributions up to the first 4% of salary. It also plans to add an automatic enrollment feature to its 401(k) plan.
