Important Changes to Your Retirement Benefits

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1 For employees participating in Bank of America 401(k) and cash balance pension plans This brochure describes upcoming changes to your retirement benefits. The key changes include shifting the focus of our retirement benefits to the 401(k) plan and away from pension plans. As we make these changes, we are ensuring our retirement benefits meet the needs of our employees and the company. The changes will align the 401(k) plans across the company to provide the same retirement benefits to all U.S.-based employees. This supports Bank of America s strategy to simplify processes and reduce legacy issues. Also, the 401(k) plan offers you control in managing your retirement savings now and in the future. What s inside: Details of 401(k) and pension plan changes... 3 Q&A... 5 Tools and resources... 7 We understand that you may be just starting out or well along the way to planning for retirement. With this in mind, we will offer a series of information sessions during the next year to help you understand what these changes mean for you and help you set and reach your retirement savings goals. What s changing? Below is a summary of what to expect. More details about the changes are provided on the following pages. RETIREMENT BENEFITS WILL BUILD ON THE 401(K) PLAN Beginning July 1, we will add to your retirement savings by making a contribution to your 401(k) account each year. This annual company contribution will be 2% or 3% of your eligible compensation, based on your years of service. In addition, we will continue to match your payroll contributions up to 5% of your eligible compensation. PENSION PLAN WILL FREEZE ( NO ADDITIONAL COMPENSATION CREDITS) On June 30, your cash balance pension plan will freeze. Your account will no longer grow through dollar amounts credited to your account also referred to as compensation credits. However, your account will continue to earn interest and/or investment credits until you take a distribution. 401(K) PLANS WILL BE ALIGNED By Jan. 1, 2013, the 401(k) plans offered across the bank will be aligned to provide the same benefits and features. Soon, you ll hear more about the alignment of investment fund choices offered across our 401(k) plans. This change is scheduled for spring You ll receive a new investment fund guide describing each of the fund choices and how the changes may affect your current investments. There are no immediate steps that you need to take based on this announcement, but it s important that you understand these changes and incorporate them into your retirement planning. You will receive additional information throughout the year as we continue to focus on the 401(k) plans and align them across the bank, but the changes outlined in this brochure represent the most significant changes to the plans.

2 The big picture How your retirement benefits are changing Here s a glimpse of retirement benefits now and after the changes. NOW 401(K) PLAN PENSION PLAN Your payroll contribution Company-matching contribution Investment earnings Compensation credits Interest and investment credits You select the percentage you want to contribute to your account each pay period. The bank matches your contributions up to 5% of your eligible compensation. You choose how your funds are invested, and the earnings (gains or losses) are posted to your account. + Compensation credits equal to 4% of your eligible compensation* are added to your account. Your account earns interest and/or investment credits (gains and losses). BEGINNING JULY 1, (K) PLAN PENSION PLAN Your payroll contribution Company-matching contribution Investment earnings NEW Annual company contribution Interest and investment credits You continue to select the percentage you want to contribute to your account each pay period. The bank continues to match your contributions up to 5% of your eligible compensation. You continue to choose how your funds are invested, and the earnings (gains or losses) are posted to your account. The bank automatically will contribute 2% or 3% of your eligible compensation, based on your years of vesting service. + Your account continues to earn interest and/or investment credits (gains and losses). Key terms to know about your 401(k) plan Eligible compensation Your base pay or draw, overtime, commissions and most cash incentives, up to $250,000. Vesting service You generally earn one month of vesting service for each month in which you are paid by Bank of America. * The 4% compensation credit rate was effective Jan. 1, Your compensation credit rate may differ depending on your years of service or legacy company. 2

3 Details of 401(k) and pension plan changes How the annual company contribution to the 401(k) account will work Beginning July 1, Bank of America will add to your retirement savings through an annual company contribution to your account in the Bank of America 401(k) Plan or the Bank of America 401(k) Plan for Legacy Companies. The annual company contribution will help your 401(k) account grow, along with your payroll contributions and the company-matching contributions. Here is how the annual company contribution will work: DETAILS Overview Bank of America will contribute a percentage of your eligible compensation to your 401(k) account. The percentage of eligible compensation contributed to your account is determined by your years of vesting service: 2% of eligible compensation: 12 months up to 10 years of vesting service 3% of eligible compensation: 10 or more years of vesting service You will receive your annual company contribution the first quarter after the plan (calendar) year ends. If you do not have a 401(k) account at the time of the annual company contribution, one will be established automatically on your behalf. How the annual company contribution will work for 2012 Your annual company contribution for 2012 will be based on your eligible compensation from July 1 through Dec. 31, You will receive your annual company contribution for the 2012 plan year in the first quarter of EXAMPLE: Juan is an employee with seven years of service in Juan s eligible compensation from July 1 through Dec. 31 is $27,000. For the 2012 plan year, Juan will receive an annual company contribution of $540 ($27,000 x.02 = $540) in the first quarter of EXAMPLE: Lin will reach 10 years of service in October Lin s eligible compensation from July 1 through Dec. 31 is $24,000. For the 2012 plan year, Lin will receive an annual company contribution of $720 ($24,000 x.03 = $720) in the first quarter of

4 DETAILS Eligibility You are eligible for the annual company contribution beginning the first of the month after you earn 12 months of vesting service. EXAMPLE: Raj was hired on Nov. 7, Raj will become eligible for the annual company contribution on Nov. 1, 2012, which is the first of the month after he completes 12 months of vesting service. The annual company contribution he will receive in early 2013 will be 2% of his eligible compensation paid from Nov. 1 through Dec. 31, 2012, the timeframe during which he was eligible during the year. EXAMPLE: Sue was hired on Jan. 23, 2012, so she will be eligible for the annual company contribution beginning Jan. 1, She will receive the annual company contribution for 2013 in early To receive your annual company contribution, you must be employed by the bank on the last day of the year, except in the event of divestiture, severance, death or retirement under the Rule of 60. In those cases, the portion of the annual company contribution you have accrued as of your termination date will be paid to your 401(k) account after the end of that quarter. 10 years of vesting service Your annual company contribution rate will increase to 3% beginning the year in which you reach 10 years of vesting service. You will receive the 3% contribution based on your eligible compensation for that entire year. 36-month vesting rule Your annual company contributions are vested once you complete 36 months of vesting service. If you leave the company before you have earned 36 months of vesting service (except in the event of severance, divestiture or death), you will forfeit all annual company contributions you have received, including any investment gains or losses. Note: Company-matching contributions you have received will continue to be fully vested. Note: The vesting service you have earned to date counts toward your eligibility, the 36-month vesting rule and the 10-year service milestone required for the 3% annual company contribution. How the pension plan freeze will work A pension plan freeze is a common term that means no additional benefits will accrue in the pension plan. The bank s pension plans the Bank of America Pension Plan and the Bank of America Pension Plan for Legacy Companies will be frozen on June 30, and we will not add compensation credits to your account after that date. Your account will continue to earn interest and/or investment credits (gains and losses).* * The interest credit rate for former participants in the legacy BankAmerica Pension Plan will change from 11% to 8%. You will no longer receive the additional 3% reconversion account interest credit paid for being an active participant in the plan. 4

5 Q&A 1. Do I need to take any immediate steps after reading this announcement? There are no immediate steps that you need to take based on this announcement. 2. Are the bank s retirement benefits competitive with what other companies are offering? Yes, most Fortune 100 companies, including most financial services companies, primarily offer retirement benefits through the 401(k) plan and have moved away from pension plans. 3. What is happening to my pension plan? On June 30, your cash balance pension plan account will be frozen, so it will no longer be credited with compensation credits from the bank. However, your account will continue to earn interest and/or investment credits until you take a distribution. 4. Will I lose the pension I have earned? No, these changes will not impact the compensation credits or interest credits posted to your cash balance account as of June 30, In addition, after June 30, 2012, and until you take a distribution from the plan, your cash balance account (other than your pre-2008 account in the legacy Bank of America pension plan, if applicable) will continue to earn interest credits. Any pre-2008 account you have in the legacy Bank of America pension plan will continue to earn investment credits (gains and losses). 5. What happens if I m not yet vested in my pension plan? After June 30, 2012, you will continue to earn vesting service toward vesting in your pension plan while you work for the company. 6. Are the bank s pension plans well-funded? Yes, the bank s pension plans are well-funded. In the second quarter of each year, the bank sends an annual funding notice to all pension plan participants detailing the funding status of the plan. You can access the current annual funding notice for your pension plan on NetBenefits (netbenefits.com). From the home page, click on the name of your pension plan below the Pension header. Once you reach the Your Pension Summary page, select Plan Information and Documents. 7. When will I receive my 2012 annual company contribution to my 401(k) account? You will receive your 2012 annual company contribution in the first quarter of 2013, provided you meet eligibility requirements. 8. Will I still receive the company-matching contribution, in addition to the annual company contribution? Yes, upon completing 12 months of vesting service, the company will match your contributions on a dollar-per-dollar basis (100% match) up to 5% of your eligible compensation. The company match is contributed to your 401(k) account each pay period. 9. How do I see my current retirement benefits? Log on to the home page of NetBenefits (netbenefits.com) to see the current balance in your employee retirement plans. 10. How do I estimate my future retirement benefits? On Flagscape, visit the new Retirement Benefit Changes page (Flagscape > Benefits & Pay > Retirement > Retirement Benefit Changes) to access instructions on how to estimate your retirement benefits for your retirement date. The Estimating Your Pension tool on NetBenefits will not reflect these changes until mid-year. From home, visit NetBenefits (netbenefits.com) to access tools and resources to help you estimate your retirement benefits. Under News and Information, click on Tools and Resources for Retirement Planning. For help with estimating your retirement benefits and creating an overall retirement plan, contact the Benefits Education & Planning Center (BEPC). Experienced financial counselors can help you better understand and get the most out of your retirement benefits. As always, the BEPC provides independent financial counseling at no cost to you. 5

6 11. Where can I find how many years of vesting service I have? Visit NetBenefits (netbenefits.com) to view your years of vesting service. From the home page, click on the name of your pension plan below the Pension header. On the Your Pension Summary page, click on Service Summary in the left margin to view your years of vesting service. Legacy Fleet participants: On the Your Pension Summary page, select View a printable statement of your employer benefits at the bottom to view your vesting dates. 12. How does the annual company contribution work in relation to the $250,000 limit on eligible compensation? You will receive an annual company contribution on eligible compensation up to the $250,000 limit. For 2012, your annual company contribution will be based on your eligible compensation paid from July 1 through Dec. 31, 2012, until your eligible compensation reaches the $250,000 limit for the year. If your eligible compensation reaches $250,000 before July 1, you will not receive an annual company contribution for Will I receive an annual company contribution if I leave the bank before the end of the year? To receive your annual company contribution, you must be employed by the bank on the last day of the year, except in the event of divestiture, severance, death or retirement under the Rule of 60. In those cases, the portion of the annual company contribution you have accrued as of your termination date will be paid to your 401(k) account after the end of that quarter. 14. I am a part-time/temporary employee scheduled to work less than 20 hours per week. Will I receive the annual company contribution? If you complete 1,000 hours of service by June 30, 2012, you will earn compensation credits in your pension plan based on your eligible compensation from Jan. 1 through June 30. Your annual company contribution will be based on your eligible compensation from July 1 through Dec. 31. If you complete 1,000 hours after June 30, your annual company contribution will be based on all of your eligible compensation for I am newly hired and don t have a balance in my pension plan yet. Will I ever have a balance? The current eligibility requirement for the Bank of America Pension Plan is 12 months of vesting service. If you become eligible by June 1, 2012, you will receive compensation credits on eligible compensation paid through June 30, If you do not earn 12 months of vesting service by June 1, 2012, you will not participate in the pension plan. 16. How will these changes affect me if I am planning to retire this year? If you retire before July 1, you will not be affected by these changes. If you are planning to retire July 1 or later, please contact the Global HR Service Center to review your retirement benefits. You can continue to access NetBenefits for tools and resources; however, the Estimating Your Pension tool will not reflect these changes until mid-year. 17. Will these changes affect the loan I have from my pension plan? No, there is no impact to any loan you currently have from the Bank of America Pension Plan. If you currently are eligible to take a loan from the Bank of America Pension Plan, you will continue to be eligible, as long as you meet the other eligibility requirements. 18. I participate in the Transferred Savings Account. Will these changes impact that plan? No, these changes will not impact the Transferred Savings Account. 19. Are my employee retirement benefits protected? Yes, the assets that pay your benefits are held in a trust and are not subject to any claims made by creditors of the bank. 20. How can I learn more? Following this announcement, we will offer information sessions to help you learn more about your retirement benefits and how you can incorporate these changes into your overall retirement plan. In addition, refer to the Tools and Resources section on the next page to determine where to go for answers to your questions. 6

7 Tools and resources RESOURCE HOW TO REACH SUPPORT PROVIDED Retirement Benefit Changes page on Benefits & Pay Flagscape > Benefits & Pay > Retirement > Retirement Benefit Changes This new Flagscape page provides you with information about the upcoming changes to your retirement benefits. The page will be updated periodically with news, information and educational resources. You also can visit the page to reference copies of communications distributed to employees and to view instructions for estimating your benefits at retirement. You can find information about your current retirement plans in the Retirement section of Benefits & Pay. NetBenefits netbenefits.com View and manage your 401(k) and pension plans. NetBenefits can be accessed from Flagscape or from any internet-enabled computer. Financial Engines netbenefits.com > Savings & Retirement tab > Get Personalized Help from Financial Engines An easy-to-use online tool, Financial Engines offers specific, personal advice to help you make informed decisions about your retirement accounts, such as how much to save or investment choices to consider. Benefits Education & Planning Center (BEPC) Flagscape > Benefits & Pay > HR Tools & Contacts > Benefits Education & Planning Center or (TTY: ) Experienced counselors at the BEPC can help you determine any changes you might want to make to your retirement savings plan as a result of the retirement benefit changes. They also can help you better understand your retirement plans and how to get the most from your retirement benefits. Global HR Service Center (Hearing-impaired access: Dial 711, then ) If you are unable to obtain the information you need from the resources listed above, contact the Global HR Service Center. Representatives can answer questions about the retirement benefit changes and your retirement plans. When contacting the Global HR Service Center, you will need to enter your Person Number. Once authenticated, say Retirement, then say 401(k) or pension. If you do not know your Person Number, say I don t know it when prompted. Say Retirement, then say Fidelity Retirement Service Center. Please use this brochure when discussing your retirement plan with your Financial Advisor. 7

8 This communication provides information about certain Bank of America retirement benefits, effective Jan. 1, 2012 through Jan. 1, Receipt of this document does not automatically entitle you to benefits offered by Bank of America. Every effort has been made to ensure the accuracy of the contents of this communication. However, if there are discrepancies between this communication and the official plan documents, the plan documents always will govern. Bank of America reserves the right to amend or terminate any benefit plan in its sole discretion at any time and for any reason. For convenience, we use the name Bank of America in this communication because it is used at companies with different names within the Bank of America Corporation family of companies. However, by using the terms Bank of America or bank, it does not mean that you are employed by Bank of America Corporation; you are employed by the entity that directly pays your wages. Bank of America, N.A. Member FDIC Bank of America Corporation. Equal Housing Lender. Printed on recycled paper. 02/2012 8