Quarterly report pursuant to Section 13 or 15(d)

Pension and Postretirement Plans

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Pension and Postretirement Plans
 9 Months Ended
Sep. 30, 2013
Compensation and Retirement Disclosure [Abstract]  
Pension and Postretirement plans
NOTE 15 – Pension, Postretirement and Certain Compensation Plans
 
Pension and Postretirement Plans

The Corporation sponsors noncontributory trusteed pension plans, a number of noncontributory nonqualified pension plans, and postretirement health and life plans that cover eligible employees. During the three months ended September 30, 2013, the Corporation merged a defined benefit pension plan, which covered eligible employees of certain legacy companies, into the Bank of America Pension Plan. This plan is referred to as the Qualified Pension Plan (Qualified Pension Plans prior to this merger). The benefit structures of the merged plans did not change and there was no impact to plan participants. The merger of the pension plans required a remeasurement, which was accelerated from the required December 31 remeasurement, of the qualified pension obligations and plan assets at fair value as of the merger date that resulted in an increase in accumulated OCI of $1.4 billion, net-of-tax. Under pension plan accounting guidance, pension assets and obligations are required to be measured again at December 31. Effective June 30, 2012, the benefits earned in the Qualified Pension Plans were frozen. For more information on these plans, see Note 18 – Employee Benefit Plans to the Consolidated Financial Statements of the Corporation's 2012 Annual Report on Form 10-K.

Net periodic benefit cost of the Corporation's plans for the three and nine months ended September 30, 2013 and 2012 included the following components.

Components of Net Periodic Benefit Cost
 
Three Months Ended September 30, 2013
(Dollars in millions)
Qualified Pension Plan
 
Non-U.S. Pension Plans
 
Nonqualified and Other Pension Plans (1)
 
Postretirement
Health and Life
Plans
Service cost
$
—

 
$
8

 
$
—

 
$
1

Interest cost
157

 
26

 
30

 
13

Expected return on plan assets
(258
)
 
(31
)
 
(27
)
 
(2
)
Amortization of prior service cost
—

 
—

 
—

 
1

Amortization of net actuarial loss (gain)
63

 
1

 
7

 
(16
)
Recognized loss due to settlements and curtailments
—

 
—

 
2

 
—

Net periodic benefit cost (income)
$
(38
)
 
$
4

 
$
12

 
$
(3
)
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2012
Service cost
$
5

 
$
10

 
$
—

 
$
3

Interest cost
170

 
25

 
34

 
19

Expected return on plan assets
(313
)
 
(36
)
 
(38
)
 
(3
)
Amortization of transition obligation
—

 
—

 
—

 
15

Amortization of prior service cost
—

 
—

 
—

 
2

Amortization of net actuarial loss (gain)
116

 
(2
)
 
2

 
(21
)
Net periodic benefit cost (income)
$
(22
)
 
$
(3
)
 
$
(2
)
 
$
15

 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2013
Service cost
$
—

 
$
25

 
$
1

 
$
8

Interest cost
459

 
76

 
89

 
41

Expected return on plan assets
(763
)
 
(94
)
 
(82
)
 
(4
)
Amortization of prior service cost
—

 
—

 
—

 
3

Amortization of net actuarial loss (gain)
204

 
2

 
19

 
(26
)
Recognized loss (gain) due to settlements and curtailments
17

 
(7
)
 
2

 
—

Net periodic benefit cost (income)
$
(83
)
 
$
2

 
$
29

 
$
22

 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2012
Service cost
$
236

 
$
30

 
$
—

 
$
10

Interest cost
511

 
74

 
104

 
55

Expected return on plan assets
(934
)
 
(105
)
 
(114
)
 
(6
)
Amortization of transition obligation
—

 
—

 
—

 
31

Amortization of prior service cost (credits)
9

 
—

 
(4
)
 
4

Amortization of net actuarial loss (gain)
354

 
(6
)
 
7

 
(31
)
Recognized loss due to settlements and curtailments
58

 
—

 
4

 
—

Net periodic benefit cost (income)
$
234

 
$
(7
)
 
$
(3
)
 
$
63

(1) 
Includes nonqualified pension plans and the terminated Merrill Lynch U.S. pension plan.
The Corporation's best estimate of its contributions to be made to the Non-U.S. Pension Plans, Nonqualified and Other Pension Plans, and Postretirement Health and Life Plans in 2013 is $123 million, $103 million and $107 million, respectively. For the nine months ended September 30, 2013, the Corporation contributed $112 million, $78 million and $81 million, respectively, to these plans. The Corporation has not made and does not expect to make a contribution to the Qualified Pension Plan in 2013.

Certain Compensation Plans

During the nine months ended September 30, 2013, the Corporation granted 183 million restricted stock unit (RSU) awards to certain employees under the Key Associate Stock Plan. Generally, one-third of the RSUs vest on each of the first three anniversaries of the grant date provided that the employee remains continuously employed with the Corporation during that time. Except for two million RSUs that are authorized to settle in shares of common stock of the Corporation, the RSUs will be paid in cash to the employees on the vesting date based on the fair value of the Corporation's common stock as of the vesting date. The RSUs are expensed ratably over the vesting period, net of estimated forfeitures, for non-retirement eligible employees based upon the fair value of the Corporation's common stock on the accrual date. For RSUs granted to employees who are retirement eligible or will become retirement eligible during the vesting period, the RSUs are expensed as of the grant date or ratably over the period from the grant date to the date the employee becomes retirement eligible, net of estimated forfeitures. The accrued liability for the RSUs is adjusted to fair value based on changes in the fair value of the Corporation's common stock. The Corporation enters into cash-settled equity derivatives for a significant portion of the RSUs to minimize the change in expense driven by fluctuations in the fair value of the RSUs over the applicable vesting period. For additional information, see Note 19 – Stock-based Compensation Plans to the Consolidated Financial Statements of the Corporation's 2012 Annual Report on Form 10-K.