FRANKFURT, Germany, Feb. 13 (UPI) -- German banking giant Commerzbank announced Friday that it has a new company pension plan and will not be halting pensions completely after all.
"We were charged with maintaining company pensions as an important element of retirement arrangements," Uwe Tschaege, head of Commerzbank's corporate council, told the Frankfurter Allgemeine Zeitung Friday. "We were able to achieve that goal."
In place of Commerzbank's three former pension schemes, new pensions will all be determined according to a single formula. Starting Janurary 2005, the bank will pay a certain percentage of each employee's salary into a pension fund.
The company's old pension model, which was based on performance, will end at the end of 2004.
Bank representatives said the new plan is expected to be less expensive than its predecessor. Details of the new system are set to be finished in June.
In addition to the set percentage account, Commerzbank employees will also take part in an industry-wide pension plan.
Commerzbank made waves at the beginning of January by announcing plans to do away with its pension program completely in the face of rising and unpredictable costs.
