Bank of America 2001 Annual Report Download - page 109

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BANK OF AMERICA 2001 ANNUAL REPORT
107
Note 15 Employee Benefit Plans
Pension and Postretirement Plans
The Corporation sponsors noncontributory trusteed qualified pension plans that cover substantially all officers and employees. The plans provide
defined benefits based on an employee’s compensation, age and years of service. It is the policy of the Corporation to fund not less than the minimum
funding amount required by ERISA. Individually, BankAmerica, Barnett Banks and NationsBank each sponsored defined benefit pension plans prior to
each of the respective mergers of these banks. The BankAmerica plan was a cash balance design plan, providing participants with compensation cred-
its, based on age and period of service, applied at each pay period and a defined earnings rate on all participant account balances in the plan. The
NationsBank plan was amended to a cash balance plan effective July 1, 1998 and provided a similar crediting basis for all participants. The Barnett plan
was amended to merge into the NationsBank plan and, effective January 1, 1999, to provide the cash balance plan design feature to those participants.
The BankAmerica and NationsBank plans were merged effective December 31, 1998; however, the participants in each plan retained the cash balance
plan design followed by their predecessor plans until the plan was amended in 2000. The Corporation and the BankAmerica 401(k) retirement plans
were combined effective June 30, 2000. As part of the plan mergers, certain participants were offered a one-time opportunity to transfer certain assets
from their savings or 401(k) plans to the cash balance plan. Assets with an approximate fair value of $2.8 billion were transferred by plan participants.
The Bank of America Pension Plan (Pension Plan) allows participants to select from various earnings measures, which are based on the returns of cer-
tain funds managed by subsidiaries of the Corporation or common stock of the Corporation. The actual returns on the funds underlying the earnings
measures selected by participants determine the earnings rate on the individual participant account balances. Participants may elect to modify existing
earnings measures allocations on a daily basis. In 2001, the Corporation made a voluntary contribution to the Pension Plan of $500 million.
The Pension Plan has a balance guarantee feature, applied at the time a benefit payment is made from the plan, that protects the transferred
portion of participants’ accounts and certain credits from future market downturns. The Corporation is responsible for funding any shortfall on the
guarantee feature. At December 31, 2001, the market value of transferred assets exceeded the guaranteed amount.
In 2000, a curtailment resulted from employee terminations in connection with the Corporation’s reduction in number of associates. See Note
Two for additional information.
The Corporation sponsors a number of noncontributory, nonqualified pension plans. These plans, which are unfunded, provide defined pension
benefits to certain employees.
In addition to retirement pension benefits, full-time, salaried employees and certain part-time employees may become eligible to continue par-
ticipation as retirees in health care and/or life insurance plans sponsored by the Corporation. Based on the other provisions of the individual plans,
certain retirees may also have the cost of these benefits partially paid by the Corporation.