All other schedules required by Section 2520.103-10 of the U.S. Department of Labor’s Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.
Notes to Financial Statements
December 31, 2016
and 2015
|
1.
|
Description of the Plan
|
The following description of the Merrill Lynch & Co.,
Inc. 401(k) Savings & Investment 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.
Plan Sponsor
Bank of America Corporation (the Corporation) is the Plan Sponsor.
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. The portion of the Plan invested in Bank of America Corporation common stock (BAC common stock) is designated an Employee Stock Ownership Plan (ESOP). The
Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). Effective January 1, 2010, the Plan was closed to new participants, with certain exceptions. Eligible Corporation employees hired on
or after January 1, 2010 participate in The Bank of America 401(k) Plan with certain exceptions.
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 a 45-day opt-out election.
Participant Contributions
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, 2016 annual pre-tax and/or Roth (after tax) contributions were limited to $18,000 for participants.
5
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
1.
|
Description of the Plan
(Continued)
|
Participant Contributions
Additional 2016 contributions of $6,000 were permitted for participants over age 50. Effective January 1, 2016, participants were
permitted to contribute whole or fractional percentages of their eligible compensation at any time during the year.
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 participant has at least 10 years of vesting
service) of the participant’s eligible compensation, subject to the Plan’s applicable compensation limit, beginning the first of the month after the participant earns 12 months of vesting service.
Effective January 1, 2016, the Plan added an employee welcome contribution equal to $50 per eligible participant.
Employer contributions are made in the form of cash. After consideration of forfeitures, the actual cash remitted by the Corporation was
$258,561,827 for 2016.
Withdrawals
Withdrawals during employment are permitted under certain circumstances. There are two types of withdrawals: hardship and non-hardship. A
hardship withdrawal is available under limited circumstances, which the participant must document, and is paid in cash. Participants who take a financial hardship distribution are not permitted to make contributions during the 6 month period
beginning on the date of such distribution.
A non-hardship withdrawal is available under certain circumstances, depending on the
participant’s age, length of Plan participation, and/or type of account or sub-account involved. A non-hardship withdrawal is paid in cash or in-kind, except that active participants who are at least age 59
1
⁄
2
may elect to withdraw all, but not less than all, of their vested account balances held in BAC common stock. The payment options for non-hardship
withdrawals, to the extent permitted by Plan provisions, are generally as follows: lump-sum distributions of cash and/or securities and transfer to an individual retirement account or other brokerage account.
6
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
1.
|
Description of the Plan
(Continued)
|
Payment of Benefits
Distributions of account balances may occur upon a participant’s death, disability, retirement or other separation from service. A
participant or a beneficiary may receive distributions in a lump-sum distribution of cash and/or securities or transfer to an individual retirement account or other brokerage account. In the event of a disability or for a participant who meets
the Rule of 60, a participant may also opt to receive a withdrawal in the form of a single lump sum or in quarterly or annual installments for up to 15 years.
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 and welcome contributions as well as earnings thereon.
Effective July 1, 2012, inactive participants became vested in company matching contributions and earnings thereon based on completed
Years of Service: 1 Year of Service—20% vested; 2 Years of Service—40% vested; 3 Years of Service—60% vested; 4 Years of Service—80% vested; and 5 Years of Service—100% vested. In the event of re-employment of a
participant with unvested company matching contributions within 7 years of termination of employment, the participant shall become 100% vested in their company matching contributions. Participants are 100% vested in the dividends paid on BAC common
stock held in their account regardless of their years of service.
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 terminates employment
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, annual company and welcome contributions. 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
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
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 or
(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.
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 3.25% to
9.50% for loans held by the Plan as of December 31, 2016 and 2015.
Investment Alternatives
The Plan provides participants with a total of 30 investment alternatives as of December 31, 2016. 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).
Participants may elect to modify existing investment allocations on a periodic basis subject to the provisions of the Plan.
|
2.
|
Summary of Significant Accounting Policies
|
Accounting Pronouncements 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
8
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
2.
|
Summary of Significant Accounting Policies
(Continued)
|
Accounting
Pronouncement Adopted
(Continued)
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 adopted Parts
I and II of these provisions effective January 1, 2015. Part III of the ASU has no impact on the Plan’s financial statements. The Plan’s financial statements are presented to conform to the requirements of Parts I and II of the
ASU.
In February 2017, FASB issued ASU 2017-06,
Plan Accounting—Defined Benefit Pension Plans (Topic 960), Defined Contribution
Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting (A Consensus of the Emerging Issues Task Force
). ASU 2017-06 amended the presentation and disclosure requirements relating
to master trusts in accordance with the U.S. generally accepted accounting principles. The amendments are effective for all plan years beginning after December 15, 2018 and are to be applied retrospectively. Earlier adoption is permitted.
The Corporation has early adopted ASU 2017-06. The Plan’s financial statements are presented to conform to the requirements of
ASU 2017-06.
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 statements 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 carried 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
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
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 an 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.
|
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 401(k) Plan and The Bank of America Transferred Savings Account Plan (collectively
known as Participating Plans).
10
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
4.
|
Interest in the Stable Value Master Trust
(Continued)
|
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 following tables present the Master Trust net assets and the Plan interest in the Master Trust net assets at contract value as of
December 31, 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets as of December 31, 2016
|
|
|
|
|
Master Trust
|
|
|
Plan Interest in
Master Trust
|
|
|
Money market funds
|
|
$
|
281,674,535
|
|
|
$
|
81,192,807
|
|
|
Investment contracts:
|
|
|
|
|
|
|
|
|
|
Fixed maturity synthetic guaranteed investment contracts
|
|
|
449,736,915
|
|
|
|
129,636,859
|
|
|
Constant duration synthetic guaranteed investment contracts
|
|
|
3,479,102,038
|
|
|
|
1,002,852,666
|
|
|
Insurance company separate account guaranteed investment contracts
|
|
|
504,511,408
|
|
|
|
145,425,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,715,024,896
|
|
|
|
1,359,107,963
|
|
|
Accrued expenses
|
|
|
(314,225
|
)
|
|
|
(90,575
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
$
|
4,714,710,671
|
|
|
$
|
1,359,017,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets as of December 31, 2015
|
|
|
|
|
Master Trust
|
|
|
Plan Interest in
Master Trust
|
|
|
Money market funds
|
|
$
|
181,847,999
|
|
|
$
|
47,917,484
|
|
|
Investment contracts:
|
|
|
|
|
|
|
|
|
|
Fixed maturity synthetic guaranteed investment contracts
|
|
|
395,344,530
|
|
|
|
104,174,449
|
|
|
Constant duration synthetic guaranteed investment contracts
|
|
|
3,103,493,042
|
|
|
|
817,779,563
|
|
|
Insurance company separate account guaranteed investment contracts
|
|
|
493,665,885
|
|
|
|
130,082,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,174,351,456
|
|
|
|
1,099,953,912
|
|
|
Accrued expenses
|
|
|
(283,798
|
)
|
|
|
(74,782
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
$
|
4,174,067,658
|
|
|
$
|
1,099,879,130
|
|
|
|
|
|
|
|
|
|
|
|
11
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
4.
|
Interest in the Stable Value Master Trust
(Continued)
|
The following table presents net investment income for the Master Trust for the year ended
December 31, 2016:
|
|
|
|
|
|
|
Net appreciation in fair value of investments
|
|
$
|
5
|
|
|
Interest
|
|
|
93,797,857
|
|
|
Other income
|
|
|
1,715
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
93,799,577
|
|
|
Net transfers
|
|
|
448,047,558
|
|
|
Investment management and other expenses
|
|
|
(1,204,122
|
)
|
|
|
|
|
|
|
|
Increase in net assets
|
|
|
540,643,013
|
|
|
Net assets:
|
|
|
|
|
|
Beginning of year
|
|
|
4,174,067,658
|
|
|
|
|
|
|
|
|
End of year
|
|
$
|
4,714,710,671
|
|
|
|
|
|
|
|
|
Plan interest in the Stable Value Master Trust investment income
|
|
$
|
25,584,190
|
|
|
|
|
|
|
|
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.
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%.
12
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
4.
|
Interest in the Stable Value Master Trust
(Continued)
|
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.
|
|
|
|
|
|
|
|
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
|
|
|
13
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
5.
|
Fair Value Measurements
(Continued)
|
|
|
|
|
|
|
|
|
|
• 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
are valued at cost, which approximates fair value.
|
|
|
•
|
|
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.
|
|
|
•
|
|
Common stocks
are valued at the closing price reported on the active market on which the securities are traded.
|
There have been no changes in the methodologies used as of December 31, 2016 and 2015.
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.
14
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
5.
|
Fair Value Measurements
(Continued)
|
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, 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments at Fair Value as of December 31, 2016
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Money market funds
|
|
$
|
43,439,164
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,439,164
|
|
|
Mutual funds
|
|
|
5,355,276,091
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,355,276,091
|
|
|
Collective investment funds
|
|
|
—
|
|
|
|
1,519,274,315
|
|
|
|
—
|
|
|
|
1,519,274,315
|
|
|
Common stock
|
|
|
1,512,172,301
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,512,172,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-Master Trust investments
|
|
$
|
6,910,887,556
|
|
|
$
|
1,519,274,315
|
|
|
$
|
—
|
|
|
$
|
8,430,161,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments at Fair Value as of December 31, 2015
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Money market funds
|
|
$
|
30,062,570
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,062,570
|
|
|
Mutual funds
|
|
|
5,083,334,384
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,083,334,384
|
|
|
Collective investment funds
|
|
|
—
|
|
|
|
1,341,249,004
|
|
|
|
—
|
|
|
|
1,341,249,004
|
|
|
Common stock
|
|
|
1,248,564,955
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,248,564,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-Master Trust investments
|
|
$
|
6,361,961,909
|
|
|
$
|
1,341,249,004
|
|
|
$
|
—
|
|
|
$
|
7,703,210,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2016.
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
|
Prior to April 15, 2016, the Plan’s cash funds
were managed by BofA Global Capital Management, advised by BofA Advisors, LLC, distributed by BofA Distributors, Inc. and were 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. On April 15, 2016, the Corporation transferred BofA Global
15
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
7.
|
Related Party Transactions
(Continued)
|
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 Capital Class was reorganized into the BlackRock Liquidity Funds TempFund Institutional Shares managed by BlackRock Advisors, LLC and subsequently invested in the Fidelity Government Portfolio Fund Institutional Shares managed by
Fidelity Management & Research Company.
As of December 31, 2016 and 2015, the Plan held investments managed and administered
by BofA Global Capital Management totaling $0 and $30,062,570, respectively. The Plan received interest thereon of $26,473 during the year ended December 31, 2016.
As of December 31, 2016 and 2015, the Plan held investments in BAC common stock totaling $1,512,172,301 and $1,248,564,955, respectively.
The Plan earned dividends thereon of $18,907,931 during the year ended December 31, 2016.
Institutional Retirement & Benefit
Services (IRBS), a division of Merrill Lynch, Pierce, Fenner and Smith (a subsidiary of the Corporation) performs administrative services for the Plan. The Plan paid direct expenses to IRBS totaling $950,925 during 2016.
The Plan paid direct expenses to BANA totaling $194,813 during 2016.
|
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
|
|
|
|
|
2016
|
|
|
2015
|
|
|
Net assets available for benefits per the financial statements
|
|
$
|
10,029,283,667
|
|
|
$
|
9,050,561,950
|
|
|
Adjustment from contract value to fair value for fully benefit-responsive investment
contracts
|
|
|
1,478,134
|
|
|
|
8,569,524
|
|
|
Benefit obligations payable
|
|
|
(717,023
|
)
|
|
|
(119,089
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits per Form 5500
|
|
$
|
10,030,044,778
|
|
|
$
|
9,059,012,385
|
|
|
|
|
|
|
|
|
|
|
|
16
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
8.
|
Reconciliation to Form 5500
(Continued)
|
The following is a reconciliation of total income per the financial statements to the Form
5500 for the year ended December 31, 2016:
|
|
|
|
|
|
|
Total Plan interest in the Stable Value Master Trust investment income per the financial
statements
|
|
$
|
25,584,190
|
|
|
Adjustment from contract value to fair value for fully benefit-responsive investment
contracts
|
|
|
|
|
|
End of year
|
|
|
1,478,134
|
|
|
Beginning of year
|
|
|
(8,569,524
|
)
|
|
|
|
|
|
|
|
Total Plan interest in the Stable Value Master Trust investment income per Form 5500
|
|
$
|
18,492,800
|
|
|
|
|
|
|
|
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, 2016:
|
|
|
|
|
|
|
Benefits paid to plan participants per the financial statements
|
|
$
|
634,790,014
|
|
|
Add: Benefit obligations payable at end of year
|
|
|
717,023
|
|
|
Less: Benefit obligations payable at beginning of year
|
|
|
(119,089
|
)
|
|
|
|
|
|
|
|
Benefits paid to plan participants per Form 5500
|
|
$
|
635,387,948
|
|
|
|
|
|
|
|
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 Internal Revenue Code (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.
17
Merrill Lynch & Co., Inc. 401(k) Savings & Investment Plan
Notes to Financial Statements
December 31, 2016 and 2015
|
9.
|
Federal Income Tax Status (Continued)
|
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.
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.
18