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Bank of America Retirement

Bank of America Retirement is a retirement savings and investment company that offers many different options to help you plan for your future. Whether you’re looking for a Roth IRA, 401K, or other investments and savings plans, Bank of America has it all. Visit their site today to learn how they can help you take control of your financial future!

The Bank of America 401(k) Plan

Description of the Plan

The following variety of the Bank of America 401(k) Plan is for general information purposes only. Participants should refer to the handbook and any supplemental documents for a complete description of the provisions in this plan. If your plan was taken over by Bank of America and merged into the bank’s plan, then other provisions may also apply to you.

General

The Plan is a retirement account for employees of the Corporation and its subsidiaries. It follows the rules that are in the Employee Retirement Income Security Act of 1974, as amended (ERISA). If this plan covers you, you can make contributions to the plan. These are before-tax contributions. You cannot make after-tax contributions.

All employees are eligible for the company’s matching contribution after they have been working for 12 months. Contributions made before you have worked 12 months will not be matched.

The Plan is managed by the Bank of America Corporation Corporate Benefits Committee. The Board of Directors has the power to remove any member from the committee at any time. Members serve for free and vote on things together. The Committee is in charge of the operation and administration of the Plan. It has the power to make decisions on all questions that come up under the plan. And it can delegate responsibilities, too.

Investment Alternatives

There are 27 investment options. Effective January 2, 2009, all of the assets in the Stable Capital Fund were transferred to the new Stable Value Fund. That means that the Stable Capital Fund no longer exists. Investors had money in the Stable Capital Fund, which was then changed to the Stable Value Fund on August 17, 2009. They could also have chosen an investment called Vanguard Inflation-Protected Securities Fund Institutional Class. The Growth Fund of America Share Class R5 was put back with The Growth Fund of America Share Class R6. The other investment options are 10 BlackRock LifePath Funds. They come from Barclays Global Investors, and they were called something else before.

Contributions

The plan allows people to make pre-tax contributions from their salaries. These contributions can range from 1% to 30%. In addition, some employers may offer overtime pay, shift differential pay, vacation and holiday pay, or short-term disability benefits. There are also commissions and bonuses that may be offered by the company. Federal law said that in 2009, people who are less than 50 years old could contribute up to $16,500 to an account. They were only allowed to contribute $5,500 more if they were over 50. People can change their contribution rate on a daily basis in multiples of 1%.

Payment of Benefits

While you are still working, you can take out money from your account. You may take out all of the contributions that your employer and yourself have made.

  • Employees can make money from their retirement plan if they need to. They can only do this if they have a financial hardship, are disabled, or are 59 years old. 1/2;
  • If you are disabled or retire, you can take the employer match for 2005 and later Plan years of age.59 1/2; and
  • You can take company matching contributions if you have financial problems. This is only for people who were in the Plan before 2005. You can take it after five years of being in the Plan or after age 59 1/2.

Vesting of Benefits

Each participant is 100% vested in their contributions to the plan and company matching contributions. They are also vested in any earnings on these contributions.

Participant Accounts

Each person in the account is given the same amount every pay period. They get money when they put in and when they match people’s paychecks. Earnings for all funds are given to a participant every day, based on how much money they have compared to the total balance of the fund. If you are a participant in the plan, you can choose to have dividends on your stocks allocated to your account. You can also choose to get cash or reinvest it in the plan. If you pay loan interest, it is credited with money from other people’s loans.

Loans to Participants

People who have an account balance of $2,000 or more can borrow the money. They will need to borrow at least $1,000. The highest amount they can borrow is $50,000.

The maximum amount of money you can borrow is reduced by (i) the outstanding balance on any other loans from this plan, the pension plan, or the TSA Plan. Or (ii) if greater, the highest amount owed on any other loan from this plan, the pension plan, or TSA Plan at any time in the last year. You can take up to 50% of your account’s value if it is not already used for other loans. If you have any loans from the plan or pension, adjust this number accordingly.

Summary of Significant Accounting Policies

Basis of Accounting

The financial statements are put together in accordance with GAAP. Revenues are earned when they happen. Benefits paid to people who work for the company are recorded when they happen. All other expenses such as rent and office supplies, for example, are recorded when you pay them.

Management Estimates

Financial statements need to be made in a way that is like the other financial statements. To do this, you make guesses and assumptions about what you will get. But you might not get what you want. You might not get the right amount of money or things like that.

Investment Valuation and Income Recognition

Investments are reported at what they would sell for or the price you might pay. You report them at fair value. Remember that’s the price that would be acquired to sell an asset or paid to transfer a liability in an orderly transaction between market participants and that this is the measurement date.

Benefit responsive investments are at fair value. When people contribute, interest is taken away, and administration expenses are added. This means that the contract balance changes over time. As described in the FASB Staff Position AAG INV-1 and SOP 94-4-1, which was systematized in FASB ASC 962-205-45, investment agreements held by a defined contribution plan are required to be reported at fair value.

Plan Expenses

Some expenses are paid by the plan, not you. These include some professional fees and certain administrative fees for associate communication and services, recordkeeping, and benefit payment services. The cost of the Plan is borne by people based on their investment in the Plan. Other administrative charges and some professional fees are paid by the Corporation.

Investment Management

The Plan lets you invest in 27 different ways. Some of these ways are in mutual funds that are invested by Columbia Funds. These mutual funds are advised by an affiliate of the company, Columbia Management Group (CMG). BlackRock LifePath Funds are managed by BlackRock, a company.

Bank of America has 34% of the interest in that company, and they are independent of each other. The other investment options are things like mutual funds. They are not administered or advised by the company you work for. You can also invest in your own company’s stock or in a separate fund that is managed by an unaffiliated advisor.

Risks and Uncertainties

The Plan invests in things that can go up and down. If there is a lot of interest, the price goes down. It also goes up when people think they will get money from it later. Finally, it can go less because it has not been good for some time. Due to the level of risk associated with certain investment securities, it is possible that their value will change in the near future and that such changes could affect your account balance.

Stable Value Fund

As specified in Note 1 under Investment Alternatives, the Plan’s investment in the Stable Capital Fund was transferred to the Stable Value Fund. The Stable Value Fund is held in a special kind of bank account called a Master Trust. The master trust was created for the Stable Value Fund, which is part of The Bank of America 401(k) Plan for Legacy Companies and The TSA Plan. Each Participating Plan owns a part of the Master Trust. The assets of the Master Trust are held by Bank of America, N.A., as the trustee of the Master Trust.

Plan Termination

The Corporation can stop paying money into the Plan anytime they want to. They could also stop the Plan because of what is in ERISA. In the event the Plan terminates, all of the money in your account will be used by you. You can take it out and use it however you want.

Federal Income Tax Status

On June 9, 2008, the plan sponsor was told by a letter from the IRS that their plan was designed in the way it should be according to law. This letter tells you about changes to the Plan. The Plan Sponsor filed for an updated letter in January of 2010. The application is currently unsettled by the IRS.

The Plan administrator thinks that the Plan is following all of the rules, and so they think it is safe. The plan and the trust related to it are tax-exempt.

Litigation

The plan is being disputed by some people who say they were allowed to transfer their assets from the pension plan to the pension plan. But it is hard to predict what will happen.

The Plan is in a lawsuit. It says that some of the Nations Funds are doing things that are not good. The company and other people were trying to make more money. They thought about taking their money out of the fund. In 2005, the company and other people agreed to a settlement that was contingent on a minimum amount of money coming into the Nations Funds from another fund. The settlement was approved by the court in May 2010 and is still waiting for final approval.

Conclusion

Bank of America is all about making it easier to retire. Their retirement program offers you, your employees, and their families an opportunity to save for the future. It helps create a secure financial future by ensuring there are funds available when they retire or leave employment at your company.

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