Bank of America Pension Plan

Bank of America’s defined benefit pension plan holds approximately $20 billion in assets, covering employees and retirees from the nation’s second-largest bank by total assets. Headquartered in Charlotte, North Carolina, Bank of America serves approximately 69 million consumer and small business clients through approximately 3,800 retail financial centers nationwide.

The plan’s beneficiary base reflects decades of banking industry consolidation. Bank of America’s current form is the product of numerous mergers and acquisitions, most notably the 1998 NationsBank-BankAmerica merger, the 2004 FleetBoston Financial acquisition, the 2006 MBNA acquisition, and the 2009 Merrill Lynch acquisition during the financial crisis. Each of these transactions brought additional pension obligations under Bank of America’s management.

Investment Strategy

Bank of America’s pension plan follows a liability-driven investment framework. The portfolio is allocated across fixed income, public equities, and alternative investments. The fixed income allocation is the largest component, designed to hedge the plan’s interest rate and credit spread risk through holdings in long-duration investment-grade bonds, government securities, and structured credit.

The equity allocation is globally diversified and provides return potential above liability growth rates. As one of the nation’s largest financial institutions, Bank of America has access to sophisticated investment management capabilities and institutional-scale investment opportunities. The plan’s investment strategy is reviewed and governed by the pension investment committee.

Private Markets Approach

Bank of America’s pension plan maintains allocations to private equity and real estate. The private equity program includes commitments to established buyout, growth equity, and venture capital managers. Bank of America’s institutional relationships and scale provide access to top-tier fund managers and co-investment opportunities.

Real estate investments provide diversification, income generation, and inflation hedging. The plan’s alternatives portfolio is managed within the context of the overall de-risking strategy, with new commitments paced to maintain vintage year diversification while managing the plan’s liquidity profile. All alternative investment decisions are subject to the plan’s fiduciary governance standards.