401(k) Plan Highlights

Transcription

1 401(k) Plan Highlights RETIREMENT & BENEFIT PLAN SERVICES HomeServices Retirement Savings Plan Congratulations! You are eligible to join the HomeServices Retirement Savings Plan (the Plan ). The Plan offers a variety of attractive features, along with a broad range of investment choices that can help you build a retirement portfolio appropriate for your goals and tolerance for investment risk. With the Plan, you can take advantage of: Automatic payroll deductions Your contributions to the Plan are deducted from your paychecks automatically. It s an easy way to contribute. Automatic enrollment and automatic increase After 45 days of employment with HomeServices, you are automatically enrolled in the Plan. And, each year on January 1, your contributions will increase by 1%. (See pages 2-3 for details.) Current tax reduction With pre-tax contributions, you can defer current income taxes on those contributions. Any earnings on your pre-tax contributions are also tax-deferred. (See page 5 for how distributions are taxed.) A Roth 401(k) option The Plan also allows for Roth 401(k) contributions. With the Roth 401(k) option, withdrawals of investment earnings are tax-free provided you meet the requirements for a qualified distribution (See page 3 for details). Advice Access Through Advice Access you can get personalized recommendations for your Plan strategy. (See page 7 for details.) The Plan is an excellent way to prepare for the future and get great benefits today. The sooner you enroll in the Plan, the sooner you ll have access to the resources, tools and support to help you make your investment decisions. Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S) and other subsidiaries of Bank of America Corporation (BAC). MLPF&S is a registered broker-dealer, member SIPC and a wholly owned subsidiary of BAC. Investment Products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value 1

2 Key Features of the Plan Eligibility and Enrollment All full-time employees hired on or after April 1, 2008 are automatically enrolled in the Plan after 45 days of employment. Beginning with your first paycheck following this 45-day period, HomeServices will begin deducting 3% from your pay automatically on a pre-tax basis. You will be enrolled in the PersonalManager feature of Advice Access and your contributions will be invested according to Advice Access recommendations. (For more about Advice Access, see page 7.) If you are automatically enrolled, your contribution rate will be increased automatically by 1% each January until you have reached a contribution rate of 6%. (Note: If you are hired on or after September 1 in any year, your automatic increases will begin the first January following your one-year anniversary with the company.) What do you need to do? If you are content to invest 3% according to Advice Access recommendations, and have your contribution rate increased automatically by 1% each year, you do not need to take any action. However, you may contact Merrill Lynch at or (800) if you would like to: Contribute more or less than 3%, within the pre-tax/ Roth 401(k) limit ($17,500 in 2013) Elect Roth 401(k) contributions and/or traditional after-tax contributions Use the Portfolio Rebalancing or One-Time Implementation feature of Advice Access instead of PersonalManager Opt out of the Advice Access service and choose your own investment options Opt out of the automatic increase feature or make changes to your automatic increase elections Decline participation in the Plan altogether If you do not want to be enrolled in the Plan automatically, you must contact Merrill Lynch before payroll deductions have begun. Once enrolled, you may stop your contributions or change your contribution rate or investment direction at any time. Please note: Part-time employees are eligible to enroll in the Plan, but will not be enrolled automatically. Also, automatic enrollment only applies to new hires. If you were hired prior to April 1, 2008, you will need to actively enroll in the Plan if you want to participate. Beneficiary Designation If you participate in the Plan, you must designate a beneficiary. Any benefits that will be payable upon your death will be made as you direct on the Form. You can designate or change your beneficiary by contacting your Human Resources representative. Contributions Employee Contributions Under the Plan, you may elect to contribute from 1% to 75% of your pay on a pre-tax and/or Roth 401(k) basis, up to the IRS limit of $17,500 in In addition, the Plan allows you to contribute from 1% to 75% of your pay on a traditional after-tax basis. You may elect pretax contributions, Roth 401(k) contributions and/or traditional after-tax contributions in any combination. However, your total combined contributions (pre-tax, Roth 401(k) and after-tax) cannot exceed 75% of your eligible compensation. Additional contribution limits imposed by the Plan and the IRS may apply in certain situations. Annual additions to the Plan (including employee contributions and forfeitures) may be as high as $51,000 in 2013 (or 100% of compensation, if less). It is important to understand the differences between the three types of allowable contributions. Pre-tax contributions Pre-tax contributions reduce your current taxable income and any earnings on those contributions are tax-deferred, but distributions are fully taxable as ordinary income at the time of distribution. 2

3 Traditional after-tax contributions Traditional after-tax contributions are made after taxes are withheld, but taxes are deferred on any investment earnings on those contributions. Taxes on earnings are due upon withdrawal. Roth 401(k) contributions Roth 401(k) contributions are made after taxes are withheld, but unlike traditional after-tax contributions, any potential earnings on Roth 401(k) contributions are tax-free if you take a qualified distribution. A qualified withdrawal or distribution is one that is taken at least five tax years after the year of your first Roth 401(k) contribution and after you have attained age 59½ (or upon disability or death). There are a number of considerations in deciding whether traditional 401(k) contributions or Roth 401(k) contributions are right for you. One consideration is whether you expect your tax rate to be lower, the same, or higher when you take distributions. Another important factor is the impact that Roth 401(k) contributions may have on your current take-home pay. Benefits OnLine provides additional information about the Roth 401(k) feature and offers a modeling tool that allows you to model various hypothetical scenarios using your personal information. Automatic Increase You can elect to have your contribution rate increased automatically every year, beginning the month and year of your choice, by a percentage you choose: either 1%, 2% or 3%. You also choose the maximum contribution rate at which you want the increases to stop. If you reach the IRS pre-tax/roth 401(k) contribution limit, your automatic increases will cease. To elect automatic increases, just go to or call (800) Catch-up Contributions If you are age 50 or older during the calendar year and make the Plan or IRS maximum allowable pre-tax and/ or Roth 401(k) contribution, you may be eligible to make an additional catch-up contribution to help make up for smaller contributions you may have made earlier in your career. The maximum catch-up contribution for 2013 is $5,500. You can initiate a catch-up contribution on Benefits OnLine or by calling (800) Saver s Tax Credit If you make contributions to this retirement plan, you may be eligible to receive a tax credit of up to 50% on the first $2,000 you contribute to the Plan. This saver s tax credit can directly reduce the amount of federal income tax you pay each year. The amount of the credit depends on several factors, including the amount you contribute to the Plan, your adjusted gross income for the year, your tax filing status and your age. However, if you qualify, this credit is allowed in addition to the other tax benefits you may receive by contributing to the Plan. For more information, please consult a tax advisor. Rollovers Rollovers from the following tax-qualified plans are accepted by the Plan: Pre-tax contributions from a 403(b) tax-deferred arrangement Pre-tax contributions from a government 457 plan Pre-tax contributions from a Rollover IRA (consisting solely of assets originally contributed directly to a qualified plan) Roth 401(k) contributions from a qualified plan (such contributions may only be rolled over into a Roth 401(k) account) Note: If you are automatically enrolled in the Plan, you will also be enrolled in the automatic increase feature, up to a maximum of 6% of eligible compensation. However, you may contact Merrill Lynch if you want your automatic increases to continue beyond the 6% limit, as described above. 3

4 Vesting Your right to your account balance is called vesting. You are always 100% vested in your contributions, as well as any amounts you roll over to the Plan (each as adjusted for any earnings or losses on those contributions). HomeServices prior matching contributions are vested according to the following schedule. You receive credit for one year of vesting service for each year in which you have completed 1,000 hours. Years of service Percent vested Less than 1 0% 1 50% 2 or more 100% Investment Direction You give investment directions for your Plan account by selecting from investment choices provided under the Plan, as determined by HomeServices. A list of these choices is provided in this brochure. More information about these choices is available on Benefits OnLine under the Investments tab. If you do not make an investment election, you will be enrolled automatically in the PersonalManager feature of Advice Access and your account will be invested according to Advice Access recommendations. As a Plan participant, you may change the way your future contributions are invested as frequently as once each business day. In addition, you may transfer your account balance from one investment option to another once each business day (subject to certain restrictions that may exist). The Importance of Diversifying Your Retirement Savings To help you pursue long-term retirement security, you should give careful consideration to the benefits of a well-balanced and diversified investment portfolio. Spreading your assets among different types of investments can help reduce risk and may provide more consistent returns because a decline in the value of one investment may potentially be offset by an increase in the value of another. If you invest more than 20% of your retirement portfolio in any one company or industry, your portfolio may not be properly diversified. Although diversification does not ensure a profit or protect against loss, it can be an effective strategy to help you manage investment risk. Transaction Fees Commissions and transaction fees may apply for Self- Direct Brokerage transactions. There are generally no transaction fees or expenses (e.g., commissions, sales loads, or exchange fees) charged to a participant s account associated with the investment options offered under the Plan. However, as you consider your initial investment selections or changes to them in the future, be aware that certain mutual funds have established redemption fees or trading limitations in order to help protect the interests of long-term shareholders and combat excessive trading practices. Mutual funds may impose a fee of up to 2% for selling shares within a certain time period after purchase. Trade limitations often take the form of a restriction on the re-purchase of a fund for a pre-determined period of time after the sale of that fund. Note that these redemption fees would not apply to any automatic transactions (i.e., rebalancing funds) as part of the Advice Access service. These fees may apply to certain funds purchased through your Self-Direct Brokerage account; however, retail rules would apply. Please see the prospectus or annual report for a description of such fees related to funds purchased through your Self-Direct Brokerage account. Additionally, each investment option may charge other fees and expenses, which are taken from the assets held in the investment option before the net return is calculated. Please see the prospectus or annual report for a description of such fees and expenses. You can find details about all of these choices by clicking the Investments tab on Benefits OnLine. Loans You will be permitted to borrow against your vested Plan account balance. The maximum amount you may borrow is the lesser of: (1) $50,000 minus your highest outstanding loan balance from the Plan during the past year or (2) 50% of your account balance, minus any outstanding loan balance you may have. The minimum loan amount is $1,000. 4

5 You may have two loans outstanding at a time. A nonrefundable, one-time loan initiation fee (currently $40.00) will apply to each loan you take. You can repay each loan by payroll deduction over a five-year period. You can repay a loan over a period of 10 years (unless a shorter period is requested) if it is for the purchase of your primary residence. Withdrawals While Employed While the Plan is intended to serve you principally as a retirement savings mechanism, you can withdraw funds prior to your separation from service under certain circumstances, as outlined below. In-service withdrawals are subject to a minimum of $1,000. Pre-tax contributions: You can withdraw your pre-tax contributions and any associated earnings when you reach age 59½. Traditional after-tax contributions: You can withdraw traditional after-tax contributions at any time, regardless of the reason for the withdrawal. Earnings on these contributions may be withdrawn when you reach age 59½. Roth 401(k) contributions: You can withdraw your Roth 401(k) contributions and any associated earnings when you reach age 59½. Company contributions: You can withdraw company contributions and any associated earnings when you reach age 65. Financial hardship: You can withdraw funds if you experience an extreme financial hardship, provided you satisfy certain conditions, as defined by the Plan and in accordance with IRS regulations. Distributions You or your beneficiary may receive a distribution of your account balance following your separation from service due to: retirement termination of employment total and permanent disability death With certain exceptions, a distribution can be directly rolled over from the Plan to an IRA or another employer s plan that accepts rollovers, which can provide continued deferral of taxes. Managing Your Account You will receive a personalized account statement every quarter. The statement shows your account balance as well as any contributions and investment gains or losses credited to your account during the reporting period. For your convenience, account statements and confirmations are also available on Benefits OnLine. In addition, you can choose Online Delivery and eliminate hardcopy mailings of your documents. To choose Online Delivery on Benefits OnLine, select Current Elections, and then Delivery Preferences and follow the instructions. With Online Delivery, you will receive an notification whenever a new statement and/or confirmation is available online. Important Information If you withdraw your pre-tax contributions and any associated earnings, taxes will be due upon withdrawal. You may also be subject to a 10% additional federal tax if you take a withdrawal before age 59½. Taxes will not be due on traditional after-tax contributions, but taxes will be due on any earnings. You may also be subject to a 10% additional federal tax if you take a withdrawal of traditional after-tax earnings before age 59½. Any earnings on Roth 401(k) contributions can generally be withdrawn tax-free if you meet the two requirements for a qualified distribution : 1) At least five years must have elapsed from the year of your initial contribution, and 2) you must have reached age 59½ or become disabled or deceased. If you take a non-qualified withdrawal of your Roth 401(k) contributions, any Roth 401(k) investment returns are subject to regular income taxes, plus a possible 10% additional federal tax if withdrawn before age 59½. Regardless of the contribution type you choose, taxes on any company matching contributions and any earnings on those contributions are due upon withdrawal. You may also be subject to a 10% additional federal tax if you take a withdrawal before age 59½. 5

6 The Plan s Investment Choices Here is a list of the investment choices available in the Plan, along with their classification (from Lipper, Inc.) and symbol (for publicly traded mutual funds). See page 9 for descriptions of these investment options. Additional information about these choices is available on Benefits OnLine under the Investments tab or by calling (800) Investment Choice Lipper Classification Symbol Aston/Montag & Caldwell Growth Fund (I) Large-Cap Growth Funds MCGIX Dodge & Cox International Stock Fund International Large-Cap Core DODFX John Hancock Classic Value Fund (I) Multi-Cap Value Funds JCVIX MidAmerican Energy Stable Value Fund 1,2 Stable Value 3 N/A Morgan Stanley Institutional Small Company Growth Portfolio (I) Small-Cap Growth Funds MSSGX Oakmark Equity & Income Fund (I) Mixed-Asset Target Allocation Moderate Funds OAKBX PIMCO Total Return Fund (Institutional) Intermediate Investment Grade Debt Funds PTTRX SSgA International EAFE Index Trust 1 International Large-Cap Core N/A SSgA Passive Bond Market Index Trust 1 Intermediate Investment Grade Debt Funds N/A SSgA Russell 1000 Large Cap Growth Index Trust 1 Large-Cap Growth Funds N/A SSgA Russell 1000 Large Cap Value Index Trust 1 Large-Cap Value Funds N/A SSgA Russell 2000 Small Cap Index Trust 1 Small-Cap Core Funds N/A SSgA S&P 500 Index Fund 1 S&P 500 Index Objective Funds N/A 1 This investment option is not a mutual fund, registered under the Investment Company Act of A prospectus is not available and shares are not publicly traded or listed on exchanges. 2 This is a custom fund created by your Plan sponsor and only Plan participants may purchase units of this Fund. The designation stable value is not meant to suggest that this investment option will not experience any fluctuations in its net asset value. 3 This is not a Lipper classification. Self-Direct Brokerage Self-Direct Brokerage is a service designed for individuals who feel comfortable making investment decisions and would like a wider range of investment choices. It provides access to a wide variety of investments not included in the Plan s core investment menu (the menu of investment choices listed above), enabling you to further diversify your account. There is an annual fee of $50 to use the service. This service is intended for those who are comfortable with investing in individual securities, monitoring and managing an investment portfolio, and paying more for additional investment options. You can learn more about Self-Direct Brokerage through Benefits OnLine at or by calling Merrill Lynch at (800)

7 Advice Access Advice Access is a service that offers professional investment guidance for your retirement planning decisions. The service is easy to use, it s personalized, and it can automate your retirement plan strategy. And, it s available at no additional cost to you. Advice Access helps answer three important questions: Will I have enough for my retirement? Advice Access forecasts the likelihood of reaching your goal with your current strategy, and recommends the adjustments that may be necessary in seeking to reach your retirement income goal. How much should I contribute to the Plan? Based on your personal financial circumstances, Advice Access recommends the percentage of your eligible compensation to contribute to the Plan. You can accept this recommendation, or use your own contribution rate. How should I invest my contributions? Advice Access provides personalized recommendations on which of the Plan s investment options you should select, and what percentage of your contributions to invest in each. How Advice Access Works Basic information, such as your age, current salary, account balance (if any) and contribution rate, along with some projections about your retirement age and the amount of income you will likely need in retirement, is used to start the process. Based on this information, Advice Access will recommend a strategy that includes a suggested contribution rate, an asset allocation, and specific investments. You have three choices for implementing your Advice Access strategy: PersonalManager, Portfolio Rebalancing or One-Time Implementation. What PersonalManager Does In addition to investing your account through a mix of investments appropriate for you (after you accept your suggested strategy), the PersonalManager feature of Advice Access reviews your account approximately every 90 days. Then, based on any updates to your personal or financial information, Advice Access may implement a new investment allocation for your account to help you stay on track in seeking to reach your retirement income goals. If no changes are necessary, your portfolio will be rebalanced to keep it at its intended allocation. In addition, the funds in your account are reviewed on a quarterly basis to help ensure that they re still appropriate for the retirement strategies that Advice Access offers. What Portfolio Rebalancing Does Your account will be rebalanced on a quarterly basis to keep your investment mix in balance. However, your account will not be reviewed for any possible changes to your investments. What One-Time Implementation Does It lets you implement your strategy, but will not review or rebalance your account. With Advice Access you can also create your own portfolio and choose Portfolio Rebalancing to have your investment mix rebalanced on a regular basis. And you can create your own portfolio and have Advice Access implement it through One-Time Implementation. In this case, your portfolio will not be rebalanced and you may want to revisit Advice Access regularly to review your strategy, rebalance your investments or update your asset allocation. You can always change your implementation method at any time. Or you can stop using Advice Access at any time and make your own selections from among the Plan s investment choices. 7

8 The Flexibility You Need With Advice Access, you can provide additional information about your personal and financial situation, and receive a more tailored strategy. When you select this Tell Us More option, you can provide information such as: A spouse s salary and Social Security information Any IRAs or other investments you or a spouse may hold Expected income from other sources or holdings in another retirement plan Expenses you may be anticipating, such as college educations or elderly care The more information you provide, the more tailored your contribution and investment recommendations can be. (Any additional information you provide to Merrill Lynch is used only to provide you with investment recommendations tailored to your individual situation. This information is not made available to HomeServices.) Getting Started With Your Strategy To get started, just log on to your Plan account on Benefits OnLine at and click the Advice Access button. You ll see the recommendations that Advice Access has developed for you. You can also select the Tell Us More tab if you want to enter additional personal or financial information for a more tailored strategy. You can also call (800) and speak with a participant service representative. The Advice Access service uses a probabilistic approach to determine the likelihood that you may be able to achieve your stated goals and/or to identify a range of potential wealth outcomes that could be realized. Additionally, the recommendations provided by Advice Access do not consider your comfort level with investment risk, and may include a higher level of investment risk than you may be personally comfortable with. You are strongly advised to consider your personal goals, overall risk tolerance, and retirement horizon before accepting any recommendations made by Advice Access. You should carefully review the explanation of the methodology used, including key assumptions and limitations, which is provided in the Advice Access disclosure statement. It can be obtained through Benefits OnLine or through a participant service representative. IMPORTANT: The projections or other information shown in the Advice Access service regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time. 8

9 Descriptions of Your Investment Options Aston/Montag & Caldwell Growth Fund The investment seeks long-term capital appreciation and, secondly, current income. The fund primarily invests in common stocks and convertible securities. The portfolio manager uses a bottom-up approach to stock selection and seeks high quality, well-established large-cap companies that the portfolio manager believes are growing their near-term earnings at an above average rate. It may invest in foreign securities. Dodge & Cox International Stock Fund The investment seeks long-term growth of principal and income. The fund generally invests primarily in a diversified portfolio of equity securities issued by non- U.S. companies from at least three different foreign countries, including emerging markets. It focuses on countries whose economic and political systems appear more stable and are believed to provide some protection to foreign shareholders. The fund invests primarily in medium-to-large well established companies based on standards of the applicable market. John Hancock Classic Value Fund The investment seeks long-term growth of capital. The fund normally invests at least 80% of net assets in domestic equity securities. In managing the portfolio, the sub-adviser seeks to identify companies that it believes are currently undervalued relative to the market, based on estimated future earnings and cash flow. These companies generally have market values at valuation ratios, such as price-to-book, below market average, as defined by the Standard & Poor s 500 index. Under normal market conditions, the fund is almost entirely invested in stocks. The fund may invest in securities of foreign issuers. MidAmerican Energy Stable Value Fund The Stable Value Fund seeks to provide a stable rate of return with preservation of principal and liquidity as primary objectives. The Fund invests in a diversified portfolio of high quality, stable value investments offering price stability and liquidity. These investments are diversified across various sectors, which may include traditional Guaranteed Investment Contracts (GICs) issued by major, high quality insurance companies, high quality stable value collective investment trusts, and wrapped fixed income investments. The fund may be appropriate for investors who desire a low-risk investment and are willing to forego the potential for capital appreciation. This investment option is not a mutual fund, registered under the Investment Company Act of A prospectus is not available and shares are not publicly traded or listed on exchanges. This is a custom fund created by your Plan sponsor and only Plan participants may purchase units of this Fund. The designation stable value is not meant to suggest that this investment option will not experience any fluctuations in its net asset value. Morgan Stanley Institutional Small Company Growth Portfolio The investment seeks long-term capital appreciation. The fund invests at least 80% of assets in growthoriented equity securities of small U.S. and foreign companies with market capitalizations of generally less than $4 billion. It may invest up to 25% of net assets in foreign securities, including emerging market securities, classified as ADRs, GDRs, ADSs or GDSs, foreign U.S. dollar-denominated securities that are traded on a U.S. exchange or local shares of foreign issuers. The fund may invest up to 10% of net assets in REITs. Oakmark Equity & Income Fund The investment seeks current income, preservation and growth of capital. The fund invests primarily in a diversified portfolio of U.S. equity and fixed-income securities (although the Fund may invest up to 35% of total assets in securities of non-u.s. issuers). It invests approximately 40-75% of total assets in common stock, including securities convertible into common stock, and up to 60% of assets in U.S. government securities and debt securities rated within the two highest grades assigned by Moody s Investors Service, Inc. or by Standard & Poor s Corporation Ratings Group, a division of The McGraw-Hill Companies. 9

10 PIMCO Total Return Fund The investment seeks maximum total return. The fund normally invests at least 65% of assets in a diversified portfolio of fixed-income instruments of varying maturities, which may be represented by forwards or derivatives such as options, futures contracts, or swap agreements. It invests primarily in investment-grade debt securities, but may invest up to 10% of total assets in high-yield securities ( junk bonds ). The fund may invest all assets in derivative instruments, such as options, futures contracts or swap agreements, or in mortgage- or asset-backed securities. 4 SSgA International EAFE Index Trust The Fund seeks an investment return that approximates as closely as practicable, before expenses, the performance of the MSCI EAFE Index (the Index ) over the long term, while providing participants the ability to purchase and redeem units on an as of basis. 5,6 SSgA Passive Bond Market Index Trust The Fund seeks an investment return that approximates as closely as practicable, before expenses, the performance of the Barclays Capital U.S. Aggregate Bond Index (the Index ) over the long term, while providing participants the ability to purchase and redeem units on an as of basis. 5,6 SSgA Russell 1000 Large Cap Growth Index Trust The investment seeks to replicate the returns and characteristics of the Russell 1000 Growth Index. SSgA s Russell 1000 Growth Index Strategy employs a replication approach to construct a fund whose returns closely track those of the Russell 1000 Growth Index. The strategy is to buy and hold securities, trading only where there is a change to the composition of the Index or when cash flow activity occurs in the Strategy. A hierarchy of trading alternatives is used when appropriate - internal crossing, external crossing, futures, and open market trades - to attempt to capitalize on every opportunity to reduce the Strategy s transaction costs. The Strategy may hold a combination of S&P 500 Growth Index and S&P MidCap 400 Index futures in lieu of cash. Holdings of futures contracts generally represent 2-5% of the Strategy s value. 4,5,6 SSgA Russell 1000 Large Cap Value Index Trust The investment seeks to replicate the returns and characteristics of the Russell 1000 Value Index. SSgA s Russell 1000 Value Index Strategy employs a replication approach to construct a portfolio whose returns closely track those of the Russell 1000 Value Index. The strategy is to buy and hold securities, trading only when there is a change to the composition of the Index or when cash flow activity occurs in the strategy. A hierarchy of trading alternatives is used when appropriate - internal crossing, external crossing, futures, and open market trades - to attempt to capitalize on every opportunity to reduce the Strategy s transaction costs. The Strategy may hold a combination of S&P 500/BARRA Value Index and S&P MidCap 400 Index futures in lieu of cash. Futures contracts generally represent 2-5% of the Strategy s value. 4,5,6 SSgA Russell 2000 Small Cap Index Trust The Fund seeks an investment return that approximates as closely as practicable, before expenses, the performance of the Russell 2000 Index (the Index ) over the long term, while providing participants the ability to purchase and redeem units on an as of basis. 5,6 SSgA S&P 500 Index Fund The SSgA S&P 500 Index Fund seeks an investment return that approximates as closely as practicable, before expenses, the performance of the S&P 500 over the long term. The SSgA S&P 500 Index Fund is managed by State Street Global Advisors. 5,6 10

11 4 A Fund s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Derivatives are subject to a number of risks such as liquidity risk, interest rate risk, market risk, credit risk and management risk. A Fund investing in a derivative instrument could lose more than the principal amount invested. 5 It is not possible to invest directly in an index. 6 This investment option is not a mutual fund, registered under the Investment Company Act of A prospectus is not available and shares are not publicly traded or listed on exchanges. Investing involves risk, including the possible loss of principal. Investments in foreign securities or sector funds, including technology or real estate stocks, are subject to substantial volatility due to adverse political, economic or other developments and may carry additional risk resulting from lack of industry diversification. Funds that invest in small- or mid-capitalization companies experience a greater degree of market volatility than those of large-capitalization stocks and are riskier investments. Bond funds have the same interest rate, inflation, and credit risks associated with the underlying bonds owned by the fund. Generally, the value of bond funds rises when prevailing interest rates fall and falls when interest rates rise. Investing in lower-grade debt securities ( junk bonds) may be subject to greater market fluctuations and risk of loss of income and principal than securities in higher rated categories. There are ongoing fees and expenses associated with investing. Bear in mind that higher return potential is accompanied by higher risk. The following copyright information refers to the investment option descriptions on pages Morningstar, Inc. All Rights Reserved. The information contained herein (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed: and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. 11

12 Accessing Your Account By Phone: Retirement & Benefits Contact Center (800) You can call the Retirement & Benefits Contact Center to access your account and get assistance. Representatives: Available Monday through Friday, from 8 a.m. to 7 p.m. (ET) on all days the New York Stock Exchange is open Interactive Voice Response system: Available virtually 24/7 What you ll need: Social Security number PIN or Password (If you have created a Password for Benefits OnLine, you can use that when prompted for your PIN.) If you need a PIN, you can create one by following the prompts. Any time you create (or reset) a Password for Benefits OnLine, that Password will replace your PIN for access to your account by phone. This material is only a general outline of the Plan. You are encouraged to read the Summary Plan Description to obtain more detailed information regarding the Plan s operation. This document gives you information you need to make educated decisions about joining the Plan and maintaining a Plan account. If a provision described in this outline differs from the applicable provision of the Plan documents, the Plan documents prevail. For more complete information on the investment options, including their management fees and other charges and expenses, please consult the prospectuses and, if available, the summary prospectuses and other comparable documents. Investors should carefully consider the investment objectives, risks, charges and expenses before investing. This, and additional information about the investment options, can be found in the prospectuses and, if available, the summary prospectuses, which can be obtained by visiting Benefits OnLine at or by calling Merrill Lynch at (800) Please read the prospectuses and, if available, the summary prospectuses carefully before investing. Benefits OnLine and PersonalManager are registered trademarks of Bank of America Corporation Bank of America Corporation. All rights reserved. ARED