Bank of America 2005 Annual Report Download - page 169

BANK OF AMERICA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements—(Continued)
to have amounts representing their account balances under The Bank of America 401(k) Plan transferred to The Bank of
America Pension Plan. The motion for class certification is pending.
The IRS is conducting an audit of the 1998 and 1999 tax returns of The Bank of America Pension Plan and The
Bank of America 401(k) Plan. This audit includes a review of voluntary transfers by participants of 401(k) Plan assets to
The Bank of America Pension Plan and whether such transfers were in accordance with applicable law. In December
2005, the Corporation received a Technical Advice Memorandum from the National Office of the IRS that concludes that
the amendments made to The Bank of America 401(k) Plan in 1998 to permit the voluntary transfers to The Bank of
America Pension Plan violated the anti-cutback rule of Section 411(d)(6) of the Internal Revenue Code. The Corporation
continues to participate in administrative proceedings with the IRS regarding issues raised in the audit.
On September 29, 2004, a separate putative class action, entitled Donna C. Richards v. FleetBoston Financial Corp.
and the FleetBoston Financial Pension Plan (Fleet Pension Plan), was filed in the U.S. District Court for the District of
Connecticut on behalf of all former and current Fleet employees who on December 31, 1996, were not at least age 50
with 15 years of vesting service and who participated in the Fleet Pension Plan before January 1, 1997, and who have
participated in the Fleet Pension Plan at any time since January 1, 1997.
The complaint alleges that FleetBoston or its predecessor violated ERISA by amending the Fleet Financial Group,
Inc. Pension Plan (a predecessor to the Fleet Pension Plan) to add a cash balance benefit formula without notifying
participants that the amendment significantly reduced their plan benefits, by conditioning the amount of benefits
payable under the Fleet Pension Plan upon the form of benefit elected, by reducing the rate of benefit accruals on
account of age, and by failing to inform participants of the correct amount of their pensions and related claims. The
complaint also alleges that the Fleet Pension Plan violates the “anti-backloading” rule of ERISA.
The complaint seeks equitable and remedial relief, including a declaration that the cash balance amendment to the
Fleet Pension Plan was ineffective, additional unspecified benefit payments, attorneys’ fees and interest.
On December 28, 2004, plaintiff filed a motion for class certification. On January 25, 2005, the defendants moved to
dismiss the action. These motions are pending.
Refco
Beginning in October 2005, BAS was named as a defendant in several federal class action and derivative lawsuits
filed in the U.S. District Court for the Southern District of New York relating to Refco Inc. The lawsuits variously name
as other defendants Refco’s outside auditors, certain officers and directors of Refco, other financial services companies
(including in two cases the Corporation), and other individuals and companies. The actions allege violations of federal
securities laws and state laws in connection with the sale of Refco securities, including the Refco senior subordinated
notes offering in August 2004 and the Refco initial public offering in August 2005. Customers of Refco have also named
BAS, the Corporation and other underwriters as defendants in a federal class action under the federal securities laws.
The complaints seek unspecified damages. BAS is also responding to various regulatory inquiries relating to Refco.
Trading and Research Activities
The SEC has been conducting a formal investigation with respect to certain trading and research-related activities
of BAS. These matters primarily arose during the period 1999-2001 in BAS’ San Francisco operations. In September
2005, the SEC staff advised BAS that it intends to recommend to the SEC an enforcement action against BAS in
connection with these matters. This matter remains pending.
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