Center Bancorp Inc. of Union, N.J., said Thursday that it was freezing its pension plan and redesigning its 401(k) plan to cut expenses.
As of Sept. 30 the $1 billion-asset company will stop the accrual of benefits in its defined-benefit plan. Any retirement benefits employees have earned up to that time will be preserved, Center said.
It also plans to double its contribution to its employees' 401(k) accounts, matching salary deferrals of up to 6%.
"Lowering expenses remains a key priority for Center Bancorp," John J. Davis, Center's president and chief executive officer, said in a news release,
"As we continue our internal review and assessment of operations, we hope to take additional steps during the balance of 2007 to increase profitability."
Center said that it expects the changes to result in savings of $900,000 to $1 million next year.
In the first quarter Union announced a 10% reduction in its head count through layoffs and voluntary resignations. At the end of the first quarter its efficiency ratio was 91.61%, well above the industry average.
In the second quarter its noninterest expenses rose 5.03% from a year earlier, to $6.1 million, because of increases in professional fees, credit report and appraisal fees, and the opening of a new office.
Center's shares closed at $10.89 Thursday, up 2%.
