Company to Partially Freeze Chemical Financial Corporation Employees'
Pension Plan
MIDLAND, Mich., May 15 /PRNewswire-FirstCall/ -- Chemical Financial
Corporation (Nasdaq: CHFC) today announced that its board of directors has
approved the partial freezing of the Chemical Financial Corporation
Employees' Pension Plan ("Plan"), effective June 30, 2006. In conjunction
with this action, Chemical Financial Corporation has announced significant
enhancements to its 401(k) Savings Plan for those employees affected by the
freeze.
"Escalating employee benefit costs are having a significant impact on
our economy. Given the complex legislative and accounting requirements of
defined benefit retirement plans, as well as the increasing impact of the
Plan on our financial results, we determined that the Company needed to
more effectively manage the risks associated with this unknown and volatile
expense. Therefore, we felt the time was right to migrate toward a defined
contribution plan," said David B. Ramaker, Chairman, President and Chief
Executive Officer, Chemical Financial Corporation.
"The partial freeze of the Plan will allow us to better control
retirement benefit expenses going forward, while at the same time preserve
employees' retirement benefits earned to date. Combined with a substantial
enhancement to the Company's 401(k) Savings Plan, the partial freeze is an
equitable manner through which we can achieve our goals," added Ramaker.
Under the partial freeze of the Plan, benefit accruals for employees
with less than fifteen years of service or whose combined age and years of
service is less than 65 will be frozen as of June 30, 2006. These employees
will be provided with an enhanced 401(k) Savings Plan benefit. The Company
will contribute four percent of an employee's eligible pay without regard
to employee contribution, while continuing its existing policy of partially
matching employee contributions to the 401(k) Savings Plan. For the
remaining employees, benefits will continue to accrue, unchanged, under the
Plan.
Due to the partial freeze of the Plan, under current actuarial
assumptions, it is anticipated that Chemical Financial Corporation's annual
pension expense will decline. The net savings in retirement benefit costs,
after accounting for increased 401(k) contributions, is expected to
approximate $2 million in 2007.
Chemical Financial Corporation is the fourth largest bank holding
company headquartered in Michigan. The Company operates through a single
subsidiary bank, Chemical Bank, with 124 banking offices spread over 32
counties in the lower peninsula of Michigan. As of March 31, 2006, the
Company had total assets of $3.74 billion. Chemical Financial Corporation
common stock trades on The Nasdaq Stock Market under the symbol CHFC and is
one of the issues comprising the Nasdaq Financial 100 index.
Forward-Looking Statements
This press release contains forward-looking statements. Words such as
"anticipates," "believes," "estimates," "expects," "intends," "should,"
"will," variations of such words and similar expressions are intended to
identify forward-looking statements. These statements reflect management's
current beliefs as to the expected outcomes of future events and are not
guarantees of future performance. These statements involve certain risks,
uncertainties and assumptions that are difficult to predict with regard to
timing, extent, likelihood and degree of occurrence. Therefore, actual
results and outcomes may materially differ from what may be expressed or
forecasted in such forward-looking statements. Factors that could cause a
difference include, among others: changes in the national and local
economies or market conditions; changes in interest rates and banking laws
and regulations; the impact of competition from traditional or new sources;
and the possibility that anticipated cost savings and revenue enhancements
from acquisitions, restructurings and bank consolidations may not be fully
realized at all or within the expected time frames. These and other factors
that may emerge could cause decisions and actual results to differ
materially from current expectations. Chemical undertakes no obligation to
revise, update, or clarify forward-looking statements to reflect events or
conditions after the date of this release.
SOURCE Chemical Financial Corporation
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Related links:
http://chemicalbankmi.com
http://www.prnewswire.com/comp/157448.html/
CONTACT:
Lori A. Gwizdala, CFO of Chemical Financial
Corporation, +1-989-839-5358
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