SunTrust 2010 Annual Report Download - page 156

SUNTRUST BANKS, INC.
Notes to Consolidated Financial Statements (Continued)
accounts. Compensation expense related to this plan for the years ended December 31, 2010, 2009 and 2008 totaled $74
million, $76 million and $80 million, respectively.
SunTrust also maintains the SunTrust Banks, Inc. Deferred Compensation Plan in which key executives of the Company are
eligible. Prior to January 1, 2010, in addition to the Deferred Compensation Plan, SunTrust maintained the SunTrust Banks,
Inc. 401(k) Excess Plan. In accordance with the terms of the plan, effective January 1, 2008, the matching contribution to the
401(k) Excess Plan increased to be the same percentage of match as provided in the qualified 401(k) Plan, which is 100% of
the first 5% of eligible pay that a participant, including an SEO, elects to defer to the applicable plan, subject to such
limitations as may be imposed by the plans’ provisions and applicable laws and regulations. Effective January 1, 2010, the
401(k) Excess Plan was merged into the Deferred Compensation Plan. All future nonqualified plan deferrals and associated
matching contributions will be made to the SunTrust Deferred Compensation Plan. Effective January 1, 2011, employees
hired on or after January 1, 2011 will become vested in the Company’s 401(k) matching contributions and matching
contributions under the Deferred Compensation Plan upon completion of two years of vesting service.
Noncontributory Pension Plans
SunTrust maintains a funded, noncontributory qualified retirement plan covering employees meeting certain service
requirements. The plan provides benefits based on salary and years of service. Effective January 1, 2008, retirement plan
participants who were Company employees as of December 31, 2007 (“Affected Participants”) ceased to accrue additional
benefits under the existing pension benefit formula after that date and all their accrued benefits were frozen. Beginning
January 1, 2008, Affected Participants who have fewer than 20 years of service and future participants accrue future pension
benefits under a cash balance formula that provides compensation and interest credits to a Personal Pension Account. The
interest crediting rate applied to each Personal Pension Account was an annual effective rate of 4.49% for 2010. Affected
Participants with 20 or more years of service as of December 31, 2007 were given the opportunity to choose between
continuing a traditional pension benefit accrual under a reduced formula or participating in the new Personal Pension
Account. Effective January 1, 2008, the vesting schedule was changed from a 5-year cliff to a 3-year cliff for participants
employed by the Company on and after that date. SunTrust monitors the funded status of the plan closely and due to the
current funded status, SunTrust did not make a contribution for the 2010 plan year.
On October 1, 2004, SunTrust acquired NCF. Prior to the acquisition, NCF sponsored a funded qualified retirement plan, an
unfunded nonqualified retirement plan for some of its participants, and certain other postretirement health benefits for its
employees. Effective December 31, 2004, participants no longer earned future service in the NCF Retirement Plan (the
qualified plan), and participants’ benefits were frozen with the exception of adjustments for pay increases after 2004. All
former NCF employees who met the service requirements began to earn benefits in the SunTrust Retirement Plan effective
January 1, 2005. On February 13, 2007, the NCF Retirement Plan was amended to completely freeze benefits for those
Affected Participants who do not elect, or are not eligible to elect, the traditional pension benefit formula in the SunTrust
Retirement Plan. The effective date for changes impacting the NCF Retirement Plan was January 1, 2008. Similar to the
SunTrust Retirement Plan, due to the current funded status of the NCF Retirement Plan, SunTrust did not make a
contribution for the 2010 plan year.
SunTrust also maintains unfunded, noncontributory nonqualified supplemental defined benefit pension plans that cover key
executives of the Company. The plans provide defined benefits based on years of service and final average salary. SunTrust’s
obligations for these nonqualified supplemental defined benefit pension plans are included within the qualified Pension Plans
in the tables presented in this section under “Pension Benefits”.
On February 13, 2007, the SERP was amended to reduce the benefit formula for future service accruals. Current participants
in the SunTrust SERP will continue to earn future accruals under a reduced final average earnings formula. All future
participants and ERISA Excess Plan participants will accrue benefits under benefit formulas that mirror the revised benefit
formulas in the SunTrust Retirement Plan. The effective date for changes impacting the SERP was January 1, 2008. After
January 1, 2008, a new SERP cash balance formula was implemented for existing participants with no limit on pay for SERP
Tier 2 participants and a minimum preserved benefit for SERP participants at December 31, 2007. On December 31, 2007,
SunTrust also adopted an additional written amendment to the SunTrust Banks, Inc. ERISA Excess Plan. This amendment
implemented changes to mirror the cash balance changes in the qualified Pension Plan, but with an earnings limit of two
times the qualified plan’s eligible earnings.
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