Bank of America 2008 Annual Report Download - page 169

Note 16 – Employee Benefit Plans
Pension and Postretirement Plans
The Corporation sponsors noncontributory trusteed qualified pension
plans that cover substantially all officers and employees, a number of
noncontributory nonqualified pension plans, and postretirement health
and life plans. The plans provide defined benefits based on an employ-
ee’s compensation and years of service. The Bank of America Pension
Plan (the Pension Plan) provides participants 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. Partic-
ipants 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
payment is made from the plan that effectively provides principal pro-
tection for participant balances transferred and certain compensation
credits. The Corporation is responsible for funding any shortfall on the
guarantee feature.
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, LaSalle and Countrywide. 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 Corpo-
ration (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), The Bank of America Pension Plan for Legacy LaSalle (the
LaSalle Pension Plan) and the Countrywide Financial Corporation Inc.
Defined Benefit Pension Plan (the Countrywide Pension Plan) provide
retirement benefits based on the number of years of benefit service and a
percentage of the participant’s average annual compensation during the
five highest paid consecutive years of their last ten years of employment.
Effective December 31, 2008, the Countrywide Pension Plan, LaSalle
Pension Plan, MBNA Pension Plan and U.S. Trust Pension Plan merged
into the FleetBoston Pension Plan, which was renamed the Bank of Amer-
ica Pension Plan for Legacy Companies. The plan merger did not change
participant benefits or benefit accruals as the Bank of America Pension
Plan for Legacy Companies continues the respective benefit structures of
the five plans for their respective participant groups.
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, LaSalle, and Countrywide. 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
participation as retirees in health care and/or life insurance plans spon-
sored 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, except for Countrywide which did not have a Post-
retirement Health and Life Plan.
The tables within this Note include the information related to the U.S.
Trust Corporation plans beginning July 1, 2007, the LaSalle plans begin-
ning October 1, 2007 and the Countrywide plans beginning July 1, 2008.
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