Employee Benefit Essay

Today, human resources are an important asset and modern companies, which to take the leading position in the market, tend to create favorable conditions to attract employees and maintain the personnel preventing the high personnel turnover rate. In this respect, the banking industry is particularly vulnerable to the high competition between banks for well-qualified human resources because banks need well-qualified and efficient employees who can perform efficiently in the time of the financial crisis. At this point, it is possible to refer to the experience of the Bank of America, where I am currently working, since the bank develops employee benefits programs related not only to pension and postretirement plans but also to environmental concerns of its employees. As a result, employees are confident in their security and in their future that stimulates them work better and harder to maintain their position in the bank and maximize potential employee benefits the bank offers to its employees.

First of all, it should be said that the Bank of America is one of the largest banks in the US and it tends to maintain the leading position in the national market and expand its presence in international markets. In such a situation, the bank naturally needs highly professional employees who can carry out strategic plans of the bank with minimal costs and maximum efficiency. As a result, the Bank of America develops employee benefits programs which aim at the improvement of the position of employees, their social protection and, thus, the bank forms employee loyalty.

In this respect, the pension and postretirement program is particularly important, especially today, when job cuts have already become an essential part of the development of the American banking system for banks have to cut jobs to minimize their expenses and to overcome current financial problems. In actuality, the Bank of America attempts to support its employees after retirement and the pension and postretirement plan aims at the provision of employees of the bank with a stable income even after their retirement from the bank. At this point, it is important to stress the fact that the bank’s pension plan covers all officers and employees. The plan provides defined benefits based on an employee’s compensation, age and years of service. The major principle of pension and postretirement plan is the principle of respect of employee’s loyalty to the bank since the more an employee has worked for the bank the more benefits he or she can receive after the retirement. The Bank of America Pension Plan provides participants with compensation credits based on age and years of service. The Pension Plan allows participants to select from various earning measures, which are based on returns of certain funds or common stock of the corporation. The participant-selected earnings measures determine the earning rate on an individual account balances in the Pension Plan. Participants may select to modify their earnings measure allocations on a daily basis. The benefits become vested upon completion of five years of service. For instance, in 2004, the Bank of America contributed $87 million to the Pension Plan, the Nonqualified Pension Plans and the Postretirement Health and Life Plans. (Light, 87)

In such a way, the Pension and Postretirement plans comprise an essential part of the social responsibility policies of the Bank of America. These policies are beneficial to employees because their retirement is secured and they can certain in their future after the retirement. These facts are very important taking into consideration possible problems employees may face in case of the absence of pension plans developed by the Bank of America.

At the same time, the Bank of America develops other employee benefit programs, including programs which meet the environmental concerns of employees. In this respect, it is worth mentioning the plan aiming at the maintenance and support of green policies of the bank. In terms of this plan, employees got cash incentives from the bank to buy hybrid vehicles. In this respect, it is important to lay emphasis on the fact that such a step from the part of the bank had a dubious effect. On the one hand, it was truly beneficial to employees, while, on the other hand, it was an efficient promotional step which stressed the green concerns of the Bank of America that naturally contributed to the formation of a positive public image of the bank. At this point, it is necessary to dwell upon employee benefits from the cash incentives supplied by the bank to buy hybrid vehicles. Firstly, cash incentives allowed employees save costs and buy cars immediately after they got the money from the bank. Secondly, hybrid vehicles are consistently more fuel-efficient compared to conventional cars. As a result, employees could save costs while exploiting hybrid vehicles because they spend less on gasoline.

Thus, taking into account all above mentioned, it is possible to conclude that the Bank of America develops efficient employee benefit plans which aim at the maintenance of employee loyalty to the bank. At the same time, its pension and postretirement plans along with environmental plans are beneficial to employees.