Bank of America 2007 Annual Report Download - page 155

Regulatory Capital
December 31
2007 2006
Actual Minimum Actual Minimum
(Dollars in millions) Ratio Amount Required
(1)
Ratio Amount Required
(1)
Risk-based capital
Tier 1
Bank of America Corporation 6.87% $ 83,372 $48,516 8.64% $ 91,064 $42,181
Bank of America, N.A. 8.23 75,395 36,661 8.89 76,174 34,264
FIA Card Services, N.A. 14.29 21,625 6,053 14.08 19,562 5,558
LaSalle Bank, N.A.
(2)
9.91 6,838 2,759 –– –
Total
Bank of America Corporation 11.02 133,720 97,032 11.88 125,226 84,363
Bank of America, N.A. 11.01 100,891 73,322 11.19 95,867 68,529
FIA Card Services, N.A. 16.82 25,453 12,105 17.02 23,648 11,117
LaSalle Bank, N.A.
(2)
11.02 7,605 5,518 –– –
Tier 1 Leverage
Bank of America Corporation 5.04 83,372 49,595 6.36 91,064 42,935
Bank of America, N.A. 5.94 75,395 38,092 6.63 76,174 34,487
FIA Card Services, N.A. 16.37 21,625 3,963 16.88 19,562 3,478
LaSalle Bank, N.A.
(2)
9.21 6,838 2,226 –– –
(1) Dollar amount required to meet guidelines for adequately capitalized institutions.
(2) LaSalle Bank, N.A. is presented for periods subsequent to October 1, 2007.
Note 16 – 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 and years of serv-
ice. The Bank of America Pension Plan (the Pension Plan) provides partic-
ipants with compensation credits, generally based on years of service. For
account balances based on compensation credits prior to January 1,
2008, the Pension Plan allows participants to select from various earnings
measures, which are based on the returns of certain funds or common
stock of the Corporation. The participant-selected earnings measures
determine the earnings rate on the individual participant account balances
in the Pension Plan. Participants may elect to modify earnings measure
allocations on a periodic basis subject to the provisions of the Pension
Plan. For account balances based on compensation credits subsequent to
December 31, 2007, the account balance earnings rate is based on a
benchmark rate. For eligible employees in the Pension Plan on or after
January 1, 2008, the benefits become vested upon completion of three
years of service. It is the policy of the Corporation to fund not less than
the minimum funding amount required by ERISA.
The Pension Plan has a balance guarantee feature for account balan-
ces with participant-selected earnings, applied at the time a benefit pay-
ment is made from the plan that protects participant balances transferred
and certain compensation credits from future market downturns. The
Corporation is responsible for funding any shortfall on the guarantee fea-
ture.
As a result of recent mergers, the Corporation assumed the obliga-
tions related to the pension plans of former FleetBoston, MBNA, U.S. Trust
Corporation and LaSalle. These plans together with the Pension Plan, are
referred to as the Qualified Pension Plans. The Bank of America Pension
Plan for Legacy Fleet (the FleetBoston Pension Plan) and the Bank of
America Pension Plan for Legacy U.S. Trust Corporation (the U.S. Trust
Pension Plan) are substantially similar to the Pension Plan discussed
above; however, these plans do not allow participants to select various
earnings measures; rather the earnings rate is based on a benchmark
rate; in addition, both plans include participants with benefits
determined under formulas based on average or career compensation and
years of service rather than by reference to a pension account. The Bank
of America Pension Plan for Legacy MBNA (the MBNA Pension Plan) and
The Bank of America Pension Plan for Legacy LaSalle (the LaSalle Pension
Plan) provide retirement benefits based on the number of years of benefit
service and a percentage of the participant’s average annual compensa-
tion during the five highest paid consecutive years of their last ten years of
employment.
The Corporation sponsors a number of noncontributory, nonqualified
pension plans (the Nonqualified Pension Plans). As a result of mergers,
the Corporation assumed the obligations related to the noncontributory,
nonqualified pension plans of former FleetBoston, MBNA, U.S. Trust
Corporation, and LaSalle. These plans, which are unfunded, provide
defined pension benefits to certain employees.
In addition to retirement pension benefits, full-time, salaried employ-
ees 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. The obligations assumed as a result of the mergers are
substantially similar to the Corporation’s Postretirement Health and Life
Plans.
The tables within this Note include the information related to the
MBNA plans described above beginning January 1, 2006, the U.S. Trust
Corporation plans beginning July 1, 2007 and the LaSalle plans beginning
October 1, 2007.
On December 31, 2006, the Corporation adopted SFAS 158 which
requires the recognition of a plan’s over-funded or under-funded status as
an asset or liability with an offsetting adjustment to accumulated OCI.
SFAS 158 requires the determination of the fair values of a plan’s assets
at a company’s year end and recognition of actuarial gains and losses,
prior service costs or credits, and transition assets or obligations as a
component of accumulated OCI. These amounts were previously netted
against the plans’ funded status in the Corporation’s Consolidated Bal-
ance Sheet pursuant to the provisions of SFAS 87. These amounts will be
subsequently recognized as components of net periodic benefit costs.
Further, actuarial gains and losses that arise in subsequent periods that
Bank of America 2007 153