Notes to Financial Statements
December 31, 2015 and 2014
|
1.
|
Description of the Plan
|
The following description of The Bank of America 401(k) Plan (the Plan) is provided for general information purposes only. Participants
should refer to the Summary Plan Description and any supplements thereto for a more complete description of applicable Plan provisions. Other Plan provisions may also apply to participants from predecessor plans assumed by Bank of America
Corporation (the Corporation) and merged into the Plan.
Plan Sponsor and Participating Employers
The Corporation is the Plan Sponsor. Participating employers in the Plan include the Corporation and certain of the Corporation’s
principal subsidiaries.
Plan Administrator
The Plan is administered by the Bank of America Corporation Corporate Benefits Committee (the Committee). Effective June 16, 2015, the Compensation and Benefits Committee of the Corporation delegated
to the Global Human Resources Executive of the Corporation the authority to select members of the Committee. Members of the Committee serve without compensation and act by majority vote. The Committee has overall responsibility for the operation and
administration of the Plan including the power to construe and interpret the Plan, decide all questions that arise thereunder, and to delegate responsibilities.
Plan Trustee
Bank of America, N.A. (BANA) is the Plan Trustee.
General
The Plan is a defined contribution plan for employees of the Corporation and participating subsidiaries. It is subject to the provisions
of the Employee Retirement Income Security Act of 1974, as amended (ERISA). Full-time, part-time and temporary employees paid by US payroll are eligible to participate in the Plan after hire.
Participant Contributions
All employees covered by the Plan are eligible to make pre-tax and Roth (after-tax) contributions as soon as administratively practical after employment commences. Effective January 1, 2015, each
participant may elect to make pre-tax and Roth (after-tax) contributions to the Plan through payroll deductions from 1% to 75% of such participant’s eligible compensation (as defined in the Plan document) for each pay period. In accordance with
federal law, 2015 annual pre-tax contributions were limited to $18,000 for participants. Additional 2015 contributions of $6,000 were permitted for participants over age 50. Effective July 1, 2015, participants were permitted to contribute any
percentage (from multiples of 1.0%) of their eligible compensation as participant contributions at any time during the year.
5
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
1.
|
Description of the Plan
(Continued)
|
Employer Contributions
All employees covered by the Plan are eligible to receive company matching contributions and an annual company contribution after
completing 12 months of service. Any pre-tax and/or Roth (after-tax) contributions made prior to completing 12 months of service are not eligible for the company matching contribution. The company matching contribution is calculated and allocated to
the participant’s account on a pay period basis beginning the first of the month after the participant earns 12 months of vesting service and is equal to the first 5% of plan-eligible compensation contributed by the participant for the pay
period. The company matching contribution is made in cash and directed to the same investment choices as the pre-tax and/or Roth (after-tax) contributions. An end of year “true-up” matching contribution is also provided.
The Corporation also provides an annual company contribution equal to 2% (3% if the participant has at least 10 years of vesting service)
of the participant’s eligible compensation beginning the first of the month after the participant earns 12 months of vesting service.
Employer contributions are made in the form of cash. After consideration of forfeitures, the actual cash remitted by the Corporation was $774,089,018 for 2015.
Other Income
The Plan received other income in June 2015 representing proceeds from the settlement of The Bank America Corporation Securities Litigation, a class action filed in the Federal District Court for the
Southern District of New York. The payment was allocated among current and former plan participants based on the court-ordered Plan of Allocation to eligible claimants.
Payment of Benefits
While still in service, participants may generally
withdraw employee and employer vested contributions as follows:
|
|
(1)
|
Employee contributions may be withdrawn in the case of financial hardship within the meaning of Section 401(k) of the Internal Revenue Code (IRC),
disability or after age 59
1
/
2
;
|
|
|
(2)
|
Company matching contributions for 2005 and later plan years may be withdrawn in the case of disability or after age 59
1
/
2
; and
|
|
|
(3)
|
Company matching contributions for pre-2005 plan years may be withdrawn in the case of financial hardship (as referenced above), disability, after 5
years of Plan participation, or after age
59
1
/
2
.
|
6
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
1.
|
Description of the Plan
(Continued)
|
Participants who take a financial hardship distribution shall not be permitted to make
contributions during the 6 month period beginning on the date of such distribution.
Following a participant’s death,
disability, retirement or other separation from service, all vested amounts held in the Plan for a participant’s benefit are payable in a single lump sum. The form of payment is cash, except to the extent that the participant elects to have the
portion of his/her account invested in the Bank of America Corporation Common Stock Fund distributed in shares of Bank of America Corporation Common Stock. The Plan provides other payment methods for certain participants in predecessor plans merged
with the Plan.
Rollovers from the Plan were no longer accepted by the Pension Plan for any benefit commencement date after
June 1, 2015. Rollover elections needed to be received by May 22, 2015 in order to be effective for a June 1, 2015 commencement date. Prior to June 1, 2015, certain participants were able to roll over a portion or all of their
vested Plan balance to increase their monthly annuity payment under The Bank of America Pension Plan (the Pension Plan) if their vested cash balance account in the Pension Plan and account balance in this Plan both exceeded $5,000.
Vesting of Benefits
Each participant is 100% vested in the participant’s pre-tax, Roth (after-tax) and rollover contributions to the Plan and company matching contributions as well as earnings thereon.
The annual company contribution, including earnings thereon, is fully vested after completion of 36 months of vesting service (with
accelerated vesting upon the attainment of normal retirement age, or in the event of retirement, severance, divestiture or death) and is forfeited if a participant leaves prior to completing such vesting service requirement.
Participant Accounts
Each participant’s account is credited with the allocation of the participant’s pre-tax, Roth (after-tax) rollover, company matching, and annual company contribution. Earnings for all funds are
allocated to a participant’s account on a daily basis based on the participant’s account balance in relation to the total fund balance. Participants may elect to have the dividends earned on the Corporation’s stock allocated to their
accounts paid directly to them in cash or reinvested in the Plan. Interest on participant notes receivable is credited to the accounts of the participant making the payment.
7
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
1.
|
Description of the Plan
(Continued)
|
Participant Notes Receivable
Generally, active participants in the Plan are eligible for loans from the Plan. A maximum of two outstanding loans is permitted at any
time. Interest rates on loans are generally calculated based on the prime rate as published by Reuters on the last business day of the month prior to the month the loan was obtained. Interest rates on the loans are fixed. General purpose loans have
a term of 1 to 5 years and principal residence loans have a term of 1 to 15 years. The maximum loan amount that may be obtained is the lesser of (a) 50% of the participant’s vested account balance reduced by any outstanding loan balance,
(b) $50,000 reduced by the highest outstanding balance of loans under the Plan and under any tax-qualified plans maintained by affiliates during the 12 month period ending on the day before the loan was made or (c) 50% of vested balance
under all Plans reduced by the unpaid balance of any other loans under the Plan.
Each loan bears an interest rate equal to the
prime rate plus 1% and is fixed for the life of the loan. Interest rates ranged from 4.25% to 11.50% for loans held by the Plan as of December 31, 2015 and 2014.
Investment Alternatives
The Plan provides participants with a total of 30
investment alternatives as of December 31, 2015. Investment alternatives include 13 mutual funds, 15 collective investment funds (including 10 LifePath Index funds), a Stable Value Fund and the Bank of America Corporation Common Stock Fund
(invests primarily in the Corporation’s common stock).
Effective November 14, 2014, the following changes were made
to the Plan’s investments:
|
|
•
|
|
The LifePath Index 2015 Fund ceased to exist. All assets of the LifePath Index 2015 Fund were automatically converted to the LifePath Index Retirement
Fund.
|
|
|
•
|
|
The Plan began offering the LifePath Index 2060 Fund.
|
Participants may elect to modify existing investment allocations on a periodic basis subject to the provisions of the Plan.
The Plan also includes a Segregated Fund that is not available for additional participant investments. The Segregated Fund consists of the segregated investments and accounts of certain participants of
the former NationsBank Texas Plan.
8
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
2.
|
Summary of Significant Accounting Policies
|
Accounting Pronouncement Adopted
In July 2015, the Financial Accounting
Standards Board (FASB) issued Accounting Standard Update (ASU) 2015-12,
Plan Accounting: Defined Benefit Pension Plans, Topic 960; Defined Contribution Plans, Topic 962; and Health and Welfare Benefit Plans, Topic 965: (Part I) Fully
Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient
. Part I requires fully benefit-responsive investment contracts to be measured, presented, and disclosed only at
contract value. Part II eliminates the requirements for plans to disclose individual investments that represent 5 percent or more of net assets available for benefits, and the net appreciation or depreciation for investments by general type for both
participant-directed investments and nonparticipant-directed investments. Part II also requires that investments be grouped only by general type, eliminating the need to disaggregate the investments by nature, characteristics and risks. Part III
provides a practical expedient to permit plans to measure investments and investment-related accounts as of a month-end date that is closest to the plan’s fiscal year-end when the fiscal period does not coincide with a month-end.
The ASU is effective for fiscal years beginning after December 15, 2015. The Corporation has early adopted Parts I and II of these
provisions retrospectively to January 1, 2015. Part III of the ASU has no impact on the Plan’s financial statements. The Plan’s financial statements for the years ended December 31, 2015 and 2014 are presented to conform to
the requirements of Parts I and II of the ASU.
Significant accounting policies of the Plan are summarized below:
Basis of Accounting
The financial statements are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (GAAP). Revenues are recognized as earned. Benefits paid to plan
participants are recorded when paid. All other expenses are recorded as incurred.
Management Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
reported amounts of Plan assets and liabilities and disclosure of contingent liabilities at the date of the financial statement and the reported amounts of Plan additions and deductions during the reporting period. Actual results could differ from
those estimates.
Investment Valuation and Income Recognition
Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date (see Note 5: Fair Value Measurements).
9
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
2.
|
Summary of Significant Accounting Policies
(Continued)
|
Investment Valuation and Income Recognition
(Continued)
Benefit responsive investment contracts held in the Stable Value Master Trust (Master
Trust) are stated at contract value (which represents contributions made under the contract, plus interest less withdrawals and administration expenses) on the Statements of Net Assets Available for Benefits (see Note 4: Interest in the Stable Value
Master Trust). Contract value is the relevant measurement attribute for the portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the
amount participants would receive if they were to initiate permitted transactions under the terms of the plan.
Realized gains
(losses) on investment transactions are recorded as the difference between proceeds received and cost. Cost is determined on the average cost basis. Net appreciation (depreciation) in fair value of investments includes the reversal of previously
recognized appreciation (depreciation) related to investments sold during the period. Investment securities purchased and sold are recorded on a trade date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Participant Notes Receivable
Participant notes receivable are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent participant
notes receivable are reclassified as distributions based upon the terms of the Plan document.
Plan Expenses
Plan expenses, to the extent not paid by the Plan, are paid by the Corporation. Certain expenses are borne by participants
based on their investment selections.
|
3.
|
Risks and Uncertainties
|
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and
credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect
participants’ account balances and the amounts reported in the statement of net assets available for benefits.
10
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
4.
|
Interest in the Stable Value Master Trust
|
A portion of the Plan’s investments is in the Master Trust. The Master Trust provides a single collective investment vehicle for the Stable Value Fund investment option of the Plan, The Bank of
America Transferred Savings Account Plan and the Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan (collectively known as Participating Plans).
The assets of the Master Trust are held by BANA, as Trustee, and the portfolio is managed by an unaffiliated investment advisor, Standish Mellon Asset Management Company LLC (Standish), a wholly-owned
subsidiary of The Bank of New York Mellon Corporation. Each Participating Plan owns an undivided interest in the Master Trust.
The terms of the underlying investment contracts in the Stable Value Fund are benefit responsive, providing a guarantee by the issuer to
pay principal plus accrued interest in response to benefit-related requests for payment.
The value of the Plan’s interest
in the Master Trust is based on the beginning value of the Plan’s interest in the Master Trust plus actual contributions and allocated investment income less actual distributions and allocated administrative expenses.
The Plan had an undivided interest of 67.89% and 68.50% in the assets of the Master Trust at contract value as of December 31, 2015
and 2014, respectively. The following table presents the Master Trust net assets as of December 31, 2015 and 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
Money market funds
|
|
$
|
181,847,999
|
|
|
$
|
255,449,869
|
|
|
Investment contracts:
|
|
|
|
|
|
|
|
|
|
Fixed maturity synthetic guaranteed investment contracts
|
|
|
395,344,530
|
|
|
|
230,721,012
|
|
|
Constant duration synthetic guaranteed investment contracts
|
|
|
3,103,493,042
|
|
|
|
3,173,788,490
|
|
|
Insurance company separate account guaranteed investment contracts
|
|
|
493,665,885
|
|
|
|
483,520,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,174,351,456
|
|
|
|
4,143,479,416
|
|
|
Accrued expenses
|
|
|
(283,798
|
)
|
|
|
(258,638
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total Master Trust net assets
|
|
$
|
4,174,067,658
|
|
|
$
|
4,143,220,778
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan interest in the Stable Value Master Trust
|
|
$
|
2,833,752,911
|
|
|
$
|
2,838,158,657
|
|
|
|
|
|
|
|
|
|
|
|
11
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
4.
|
Interest in the Stable Value Master Trust
(Continued)
|
The following are the changes in net assets for the Master Trust for the year ended
December 31, 2015:
|
|
|
|
|
|
|
Net depreciation in fair value of investments
|
|
$
|
(4
|
)
|
|
Interest
|
|
|
88,292,152
|
|
|
Other income
|
|
|
4,496
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
88,296,644
|
|
|
Net transfers
|
|
|
(56,296,167
|
)
|
|
Administrative expenses
|
|
|
(1,153,597
|
)
|
|
|
|
|
|
|
|
Increase in net assets
|
|
|
30,846,880
|
|
|
Net assets:
|
|
|
|
|
|
Beginning of year
|
|
|
4,143,220,778
|
|
|
|
|
|
|
|
|
End of year
|
|
|
4,174,067,658
|
|
|
|
|
|
|
|
|
Plan interest in the Stable Value Master Trust investment income
|
|
$
|
59,425,899
|
|
|
|
|
|
|
|
The Stable Value Fund generally consists of the following types of guaranteed investment contracts (GICs)
and corresponding valuation methodologies:
Fixed Maturity Synthetic Guaranteed Investment Contracts
Fixed maturity synthetic GICs consist of an asset or collection of assets that are owned by the participating plans and a benefit
responsive, book value wrap contract purchased for the portfolio. The wrap contract provides book value accounting for the assets and assures that benefit responsive payments will be made at book value for participant directed withdrawals.
Generally, fixed maturity synthetic GICs are held to maturity. The initial crediting rate is established based on the market interest rates at the time the initial asset is purchased.
Constant Duration Synthetic Guaranteed Investment Contracts
Constant duration synthetic GICs consist of a portfolio of securities owned by the participating plans and a benefit responsive, book
value wrap contract purchased for the portfolio. The wrap contract amortizes gains and losses of the underlying securities over the portfolio duration and assures that benefit responsive payments will be made at book value for participant directed
withdrawals. The initial crediting rate is established based on the market interest rates at the time the underlying portfolio is funded.
12
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
4.
|
Interest in the Stable Value Master Trust
(Continued)
|
Insurance Company Separate Account Guaranteed Investment Contracts
Insurance company separate account GICs are investments in a segregated account of assets maintained by an insurance company for the
benefit of the investors. The total return of the segregated account assets supports the separate account GIC’s return. The crediting rate on this product will reset periodically and it will have an interest rate of not less than 0%.
It is probable that withdrawals and transfers resulting from the following events will limit the ability of the fund to
transact at book or contract value. Instead, market value will likely be used in determining the payouts to the participants:
|
|
•
|
|
Employer-initiated events – events within the control of the plan or the plan sponsor which would have a material and adverse impact on the fund;
|
|
|
•
|
|
Employer communications designed to induce participants to transfer from the fund;
|
|
|
•
|
|
Competing fund transfer or violation of equity wash or equivalent rules in place;
|
|
|
•
|
|
Changes of qualification status of the plan.
|
In general, issuers may terminate the contract and settle at other than contract value if the qualification status of employer or plan changes, breach of material obligations under the contract and
misrepresentation by the contract holder, or failure of the underlying portfolio to conform to the pre-established investment guidelines. Issuers may also make payment at a value other than book when withdrawals are caused by certain
employer-initiated events.
All contracts are benefit responsive unless otherwise noted.
|
5.
|
Fair Value Measurements
|
Accounting Standards Codification (ASC) 820,
Fair Value Measurement
, establishes a framework for measuring fair value. That
framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).
The three levels of the fair
value hierarchy under ASC 820 are described below:
|
|
|
|
|
Level 1
|
|
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to
access.
|
13
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
5.
|
Fair Value Measurements
(Continued)
|
|
|
|
|
|
Level 2
|
|
Inputs to the valuation methodology include:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
|
Quoted prices for similar assets or liabilities in active markets;
|
|
|
|
|
|
|
|
•
|
|
Quoted prices for identical or similar assets or liabilities in inactive markets;
|
|
|
|
|
|
|
|
•
|
|
Inputs other than quoted prices that are observable for the asset or liability; and
|
|
|
|
|
|
|
|
•
|
|
Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
|
|
|
|
|
|
If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or
liability.
|
|
|
|
|
Level 3
|
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based
on the lowest level of any input that is significant to the fair value measurement.
Valuation techniques used need to maximize
the use of observable inputs and minimize the use of unobservable inputs.
The following is a description of the valuation
methodologies used for assets measured at fair value:
|
|
•
|
|
Money market funds and interest bearing cash
are valued at cost, which approximates fair value.
|
|
|
•
|
|
U.S. government and government agency obligations
and
common and preferred stocks
are valued at the closing price reported on the active
market on which the securities are traded.
|
|
|
•
|
|
Asset-backed securities
are valued using the external broker bids, where applicable.
|
|
|
•
|
|
Mutual funds
are valued at the net asset value of shares held by the Plan at year end.
|
|
|
•
|
|
Collective investment funds
are stated at fair value as determined by the issuers based on the unit values of the funds. Unit values are
determined by dividing the funds’ net assets, which represent the unadjusted prices in active markets of the underlying investments, by the number of units outstanding at the valuation date.
|
There have been no changes in the methodologies used as of December 31, 2015 and 2014.
14
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
5.
|
Fair Value Measurements
(Continued)
|
The methods described above may produce a fair value calculation that may not be
indicative of net realizable value or reflective of future fair values. Furthermore, while management believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to
determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The following tables set forth by level, within the fair value hierarchy, the Plan’s non-Master Trust investments at fair value as of December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments at Fair Value as of December 31, 2015
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Money market funds and interest bearing cash
|
|
$
|
49,548,866
|
|
|
$
|
613,010
|
|
|
$
|
—
|
|
|
$
|
50,161,876
|
|
|
U.S. government and government agency obligations
|
|
|
610,816
|
|
|
|
—
|
|
|
|
—
|
|
|
|
610,816
|
|
|
Asset-backed securities
|
|
|
—
|
|
|
|
11,090
|
|
|
|
—
|
|
|
|
11,090
|
|
|
Mutual funds
|
|
|
9,121,357,639
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,121,357,639
|
|
|
Collective investment funds
|
|
|
—
|
|
|
|
4,341,235,062
|
|
|
|
—
|
|
|
|
4,341,235,062
|
|
|
Common and preferred stocks
|
|
|
2,600,992,271
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,600,992,271
|
|
|
Other investments
|
|
|
—
|
|
|
|
2,431
|
|
|
|
45,411
|
|
|
|
47,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-Master Trust investments
|
|
$
|
11,772,509,592
|
|
|
$
|
4,341,861,593
|
|
|
$
|
45,411
|
|
|
$
|
16,114,416,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments at Fair Value as of December 31, 2014
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Money market funds and interest bearing cash
|
|
$
|
46,685,728
|
|
|
$
|
860,235
|
|
|
$
|
—
|
|
|
$
|
47,545,963
|
|
|
U.S. government and government agency obligations
|
|
|
673,846
|
|
|
|
—
|
|
|
|
—
|
|
|
|
673,846
|
|
|
Asset-backed securities
|
|
|
—
|
|
|
|
13,037
|
|
|
|
—
|
|
|
|
13,037
|
|
|
Mutual funds
|
|
|
9,255,422,561
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,255,422,561
|
|
|
Collective investment funds
|
|
|
—
|
|
|
|
4,287,846,901
|
|
|
|
—
|
|
|
|
4,287,846,901
|
|
|
Common and preferred stocks
|
|
|
2,838,158,463
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,838,158,463
|
|
|
Other investments
|
|
|
—
|
|
|
|
4,323
|
|
|
|
41,534
|
|
|
|
45,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-Master Trust investments
|
|
$
|
12,140,940,598
|
|
|
$
|
4,288,724,496
|
|
|
$
|
41,534
|
|
|
$
|
16,429,706,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets forth the summary of changes in the fair value of the non-Master Trust’s
level 3 investments for the year ended December 31, 2015:
|
|
|
|
|
|
|
|
|
Other Investments
|
|
|
Balance, beginning of year
|
|
$
|
41,534
|
|
|
Net appreciation relating to non-Master Trust investments still held at reporting date
|
|
|
3,877
|
|
|
|
|
|
|
|
|
Balance, end of year
|
|
$
|
45,411
|
|
|
|
|
|
|
|
15
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
5.
|
Fair Value Measurements
(Continued)
|
Transfers Between Levels
The Plan recognizes any transfers between levels in the fair value hierarchy as of the end of the reporting period. There were no
transfers between levels for the year ended December 31, 2015.
Although it has not expressed any intention to do so, the Corporation has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions set forth in ERISA. In the event the Plan terminates, the total amounts credited to the accounts of each participant become fully vested and no further allocations shall be made.
|
7.
|
Related Party Transactions
|
The Plan’s cash funds are managed by BofA Global Capital Management, advised by BofA Advisors, LLC, distributed by BofA Distributors,
Inc. and are collectively referred to as the “BofA Funds”. BofA Global Capital Management, BofA Advisors, LLC and BofA Distributors, Inc. are all affiliates of BANA and the Corporation.
As of December 31, 2015 and 2014, the Plan held investments managed and administered by BofA Global Capital Management totaling
$49,548,866 and $46,685,728, respectively. The Plan received interest thereon of $36,379 during the year ended December 31, 2015.
As of December 31, 2015 and 2014, the Plan held investments in Bank of America Corporation Common Stock totaling $2,600,722,986 and $2,837,874,062, respectively. The Plan earned dividends thereon of
$31,541,337 during the year ended December 31, 2015.
Institutional Retirement & Benefit Services (IRBS), a
division of Merrill Lynch, Pierce, Fenner and Smith, Inc. (a subsidiary of the Corporation) performs administrative services for the Plan. The Plan paid direct expenses to IRBS totaling $834,052 during 2015.
The Plan paid direct expenses to BANA totaling $232,316 during 2015.
16
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
8.
|
Reconciliation to Form 5500
|
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
|
|
|
2015
|
|
|
2014
|
|
|
Net assets available for benefits per the financial statements
|
|
$
|
19,738,591,196
|
|
|
$
|
20,037,621,155
|
|
|
Adjustment from contract value to fair value for fully benefit-responsive investment contracts
|
|
|
22,078,712
|
|
|
|
57,155,929
|
|
|
Benefit obligations payable
|
|
|
(2,395,680
|
)
|
|
|
(2,530,559
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits per Form 5500
|
|
$
|
19,758,274,228
|
|
|
$
|
20,092,246,525
|
|
|
|
|
|
|
|
|
|
|
|
The following is a reconciliation of total income per the financial statements to the Form 5500 for the
year ended December 31, 2015:
|
|
|
|
|
|
|
Total Plan interest in the Stable Value Master Trust investment income per the financial statements
|
|
$
|
59,425,899
|
|
|
Adjustment from contract value to fair value for fully benefit-responsive investment contracts
|
|
|
|
|
|
End of year
|
|
|
22,078,712
|
|
|
Beginning of year
|
|
|
(57,155,929
|
)
|
|
|
|
|
|
|
|
Total Plan interest in the Stable Value Master Trust investment income per Form 5500
|
|
$
|
24,348,682
|
|
|
|
|
|
|
|
The following is a reconciliation of benefits paid to plan participants per the financial statements to
the Form 5500 for the year ended December 31, 2015:
|
|
|
|
|
|
|
Benefits paid to plan participants per the financial statements
|
|
$
|
1,954,982,419
|
|
|
Add: Benefit obligations payable at end of year
|
|
|
2,395,680
|
|
|
Less: Benefit obligations payable at beginning of year
|
|
|
(2,530,559
|
)
|
|
|
|
|
|
|
|
Benefits paid to plan participants per Form 5500
|
|
$
|
1,954,847,540
|
|
|
|
|
|
|
|
17
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
8.
|
Reconciliation to Form 5500
(Continued)
|
Benefit obligations payable and related benefits paid are recorded on Form 5500 for
those claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date. For financial statement purposes, such amounts are not recorded until paid.
|
9.
|
Federal Income Tax Status
|
The Internal Revenue Service (IRS) has determined and informed the Corporation by letter dated April 8, 2015 that the Plan and
related trust are designed in accordance with applicable sections of the IRC. The Plan has been amended since receiving this determination letter.
The Plan administrator believes the Plan as amended is being operated in compliance with the applicable requirements of the IRC and, therefore, believes that the Plan is qualified and the related trust is
tax exempt.
Under present federal income tax laws, a participating employee will not be subject to federal income taxes on the
contributions by the employer, or on the interest, dividends or profits on the sale of investments received by the trustee, until the participating employee’s account is distributed.
The Plan is
the subject of litigation involving certain participants’ voluntary transfer of Plan assets to the Pension Plan and whether such transfers were in accordance with applicable law. The outcome of this litigation cannot be predicted at this time.
In
preparing the Plan’s financial statements, subsequent events and transactions have been evaluated for potential recognition. Plan management determined that there are no subsequent events or transactions that require disclosure to or adjustment
in the financial statements except as disclosed below:
|
|
•
|
|
Effective January 1, 2016, the Plan added an automatic enrollment feature for employees hired on or after January 1, 2016 equal to 1% of
covered compensation subject to 45-day affirmative election, and an employee welcome contribution equal to $50 per eligible participant.
|
18
The Bank of America 401(k) Plan
Notes to Financial Statements
December 31, 2015 and 2014
|
11.
|
Subsequent Events
(Continued)
|
|
|
•
|
|
On April 15, 2016, the Corporation transferred BofA Global Capital Management’s investment management responsibilities, including the
management of certain of the BofA Funds, to BlackRock, Inc. From April 16, 2016 to April 17, 2016, the BofA Cash Reserves were reorganized into the BlackRock Liquidity Funds TempFund Institutional Shares managed by BlackRock Advisors, LLC.
|
19