Bank of America 2015 Annual Report Download - page 219

Bank of America 2015 217
investment advisors. The selected asset allocation strategy is
designed to achieve a higher return than the lowest risk strategy
while maintaining a prudent approach to meeting the plan’s
liabilities.
The expected return on plan assets assumption was developed
through analysis of historical market returns, historical asset class
volatility and correlations, current market conditions, anticipated
future asset allocations, the funds’ past experience, and
expectations on potential future market returns. The expected
return on plan assets assumption is determined using the
calculated market-related value for the Qualified Pension Plan and
the Other Pension Plan and the fair value for the Non-U.S. Pension
Plans and Postretirement Health and Life Plans. The expected
return on plan assets assumption represents a long-term average
view of the performance of the assets in the Qualified Pension
Plan, the Non-U.S. Pension Plans, the Other Pension Plan, and
Postretirement Health and Life Plans, a return that may or may not
be achieved during any one calendar year. The terminated Other
U.S. Pension Plan is invested solely in an annuity contract which
is primarily invested in fixed-income securities structured such that
asset maturities match the duration of the plan’s obligations.
The target allocations for 2016 by asset category for the
Qualified Pension Plan, Non-U.S. Pension Plans, Nonqualified and
Other Pension Plans, and Postretirement Health and Life Plans are
presented in the table below.
2016 Target Allocation
Percentage
Asset Category
Qualified
Pension Plan
Non-U.S.
Pension Plans
Nonqualified
and Other
Pension Plans
Equity securities 20 - 60 10 - 35 0 - 5
Debt securities 40 - 80 40 - 80 95 - 100
Real estate 0 - 10 0 - 15 0 - 5
Other 0 - 5 0 - 15 0 - 5
Equity securities for the Qualified Pension Plan include common stock of the Corporation in the amounts of $189 million (1.05
percent of total plan assets) and $215 million (1.15 percent of total plan assets) at December 31, 2015 and 2014.