GERMANY – Commerzbank has hailed as “good and sound” its agreement with unions that will see a unified pension plan in place by the start of next year.
“A good and sound solution has been found for both sides,” said chief financial officer Eric Strutz on a conference call, referring to an agreement reached last week with the general works council.
Bank spokesman Dennis Phillips said that under the agreement the bank is to transfer its 1.5 billion euros of accumulated pension capital into a separate trust.
“We hope to have a new corporate pension fund agreement, a unified defined contribution plan, ready to sign by mid-year,” he said. This would take effect on January 1 2005, replacing three existing defined benefit schemes frozen as of the end of this year. Works council chairman Uwe Tschaege has backed the agreement.
The arrangement would take pensions off the profit and loss account and comes as the bank’s management has signalled that it is open to being acquired.
The trust would likely be managed in-house, Phillips said. He confirmed the decision was taken after scrutiny from ratings agencies. But he added: “We have no deficit, we have no funding gap at all.” The bank will continue to pay into the industry scheme, the Bankenversicherungsverein, or BVV.
Commerzbank had attracted headlines with reports that suggested it was set to terminate its pension arrangements. The bank’s chairman Klaus-Peter Müller has acknowledged the affair was “miscommunicated”.
Meanwhile, the bank said in its 2003 earnings report today that its asset management operation would focus on expanding assets under management and raising earnings in 2004.
The comments came as the unit posted an operating profit of 90 million euros, up from 13 million euros in 2002. Müller said the business has “really good potential”.
Müller also dropped a hint about the bank’s possible role in any banking consolidation, saying: “We remain open to any reasonable solution involving others, whether at the national or international level.” The Frankfurt-based bank reported a fourth-quarter loss of 88 million euros.