ABA Banking Journal - November 2007 - (Page 26)

Community Banking of multiple generations of employees, according to Richard Rausser, vice-president and head of the benefits consulting practice group for Pentegra Retirement Services, which specializes in community bank programs. The firm is based in White Plains, N.Y. Young hires, says Rausser, have come to expect to be offered a 401K plan. Not only do they expect a plan to be available, but they also expect it to come equipped with a very generous employer match payment each year. (Perhaps they even expect nonmatching profit-sharing payments into the plan.) Unfortunately, they also like such plans because of a different “match.” That’s the strong match between 401Ks’ portability with the younger generation’s vocational mobility. Folks who don’t expect to work for you for all that long want to be able to take their money and run, to be blunt. Thus, they are happy with a defined contribution 401K plan, and Rausser says they don’t expect a defined benefit plan. Indeed, they may not even understand the concept of the classic company pension. On the other side sit defined benefit programs. With their emphasis historically on vesting as seniority accumulates, and their promise of eventual payoff, defined benefit programs have long gone hand in hand with community banking’s emphasis on employee longevity. Indeed, Rausser, whose company manages both defined contribution and defined benefit plans for client banks, says Pentegra clients with defined benefit plans find they make the bank “sticky,” in his word—employees definitely stay on. Furthermore, while younger, entry-level workers don’t much identify with defined benefit programs, candidates for middle-management and senior-management posts “get” defined benefit programs, Rausser says. And these are some of the posts that can be hardest to fill with really good newcomers as a bank attempts to replace retirees or expand its operations. “It’s easier for banks to attract those people because they offer defined benefit plans,” says Rausser. Taming through tiering Banks need fresh blood, but they also rely on experienced employees. But it’s expensive to offer all employees both kinds of plans. Rausser says that between 60% and 65% of his client companies offer both 401Ks and defined benefit plans. Rausser says some banks have responded to rising benefit costs by “hard- 26 NOVEMBER 2007/ABA BANKING JOURNAL www.ababj.com/subscribe.html http://www.pentegra.com http://www.pentegra.com http://www.consultantsandbuilders.com http://www.consultantsandbuilders.com http://www.ababj.com/subscribe.html

Table of Contents Feed for the Digital Edition of ABA Banking Journal - November 2007

ABA Banking Journal - November 2007 Contents Editor’s Column Briefing: Good News for Mortgages Sleight of Mind N.Y. Hiring Bonanza May Be Bane Snapshot: A Look at Held-For-Investment Loan Growth ABA Resources ABA Chairman’s Position “The Moose Bank” Thrives on Manufactured Housing Loans Finding the Middle Way for Your Bank’s Retirement Program Pass the Aspirin Cover Story: Self-Service Steps Up DIY U.K. Style Marketing to Millennials Getting Real With “Gen Wired” Ethnic Marketing: Disinterested Banking Getting Good at Global Sourcing Case in Point Turn Compliance on It's Head Banker’s Mart To Advertise/Index of Advertisers The Economy

ABA Banking Journal - November 2007

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