Bank of America to freeze pension plans

Bank of America had roughly 282,000 full-time employees as of December.

NEW YORK (CNNMoney) -- Bank of America announced plans Thursday to freeze pension plans, effective in July, and increase its 401(k) contributions instead.

Eligible employees will keep the pension benefits that they've earned to date but will not receive additional benefits, Bank of America (BAC, Fortune 500) spokesman Scott Silvestri said.

The company will instead begin making an additional 2-3% annual contribution to employees' 401(k) accounts, on top of the existing program that matches employee contributions up to 5%.

"Making these changes simplifies our offerings, gives employees control in managing their retirement savings and ensures our retirement benefits remain competitive," Silvestri said in an email.

U.S. companies are increasingly moving away from traditional pensions and toward 401(k) plans in an effort to save costs and minimize funding uncertainty. Last week, General Motors (GM, Fortune 500) announced that it had shifted its senior salaried workers away from a traditional pension plan to a 401(k) plan.

Bank of America had roughly 282,000 full-time employees as of December. In September, the bank announced plans to eliminate 30,000 positions over the next few years.