BofA to Move $19B DC Plan In-house

Beginning in 2015, the Bank of America Merrill Lynch Retirement Plan and Services Group will serve as administrator for the bank’s 401(k) plan, a spokesman for Bank of America told PLANADVISER. The move is part of the company’s strategy over the past five years, to connect financial benefit plans within a single platform, the spokesman said.

Since Bank of America agreed to buy the brokerage in 2008, the bank has migrated other financial plans to the Merrill Lynch platform. When Merrill joined, its platform continued to administer the legacy 401(k) platform as well as the legacy defined benefit (DB) plan. In 2009 Bank of America moved its health savings and health flexible spending accounts to Merrill Lynch’s platform, and in 2011 Merrill Lynch took over the long-term equity award plan.

Similar to Bank of America, many other financial services firms—among them JP Morgan Chase, Wells Fargo, New York Life Insurance, TIAA-CREF, Prudential Financial and Fidelity—act as both fiduciary and administrator of a retirement plan. No changes in the fund lineup are slated at this time.

Fidelity will continue administering the Bank of America pension (DB) plan, covering more than 440,000 employees and retirees, as well as its Legacy Transferred Savings Account (TSA) DC plan, with 20,000 participants.  Bank of America also is expanding its DB relationship with Fidelity with the transition of legacy Countrywide pension plan participants into their DB plan at Fidelity, a spokeswoman from Fidelity told PLANADVISER.

 “Our defined benefit and TSA plans [transferred savings account, a type of DC plan] are frozen,” the spokesman said. “And thus we decided to consolidate and service these inactive plans with one provider, in this case, Fidelity, who was already overseeing them.”

Bank of America serves 15 plans with assets of more than $1 billion, according to the spokesman, so the move fits the company’s large- and mega-market plan business. Over the past 18 months they have added 10,000 retirement plans (DB, DC, deferred compensation, equity award). “Merrill Lynch has been very present in this space and has an active client base,” the spokesman said. A dedicated team that serves mega plans is aligned to the company’s plan transition and will provide ongoing servicing.