Wells Fargo & Co. is freezing its cash-balance pension plan for all employees in a move to cut costs, a bank spokeswoman confirmed this week.
The move comes as San Francisco-based Wells Fargo & Co. is absorbing Charlotte's Wachovia Corp. The combined company will continue to have a 401(k) retirement plan in which employees contribute a portion of their salary to an investment account. The bank will continue to match employee contributions up to 6 percent of their pay.
Cash-balance plans are a type of traditional pension plan in which employers provide for their workers' future retirement benefits. In 401(k) plans, employees set aside a portion of their own paychecks, which can be partially matched by their employers. These dollars rise and fall based on the employees' investment choices.
Employers have been increasingly scaling back pension plans, and in some cases 401(k) plans, to cut costs.
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