Federal filings by the nation's second-largest bank Thursday showed the company violated U.S. tax law in 1998 and 1999 by allowing employees to move 401(k) holdings to the company's pension plan, according to the Charlotte Observer.
In its ruling, the Federal agency said that by allowing employees to move their savings out of a defined contribution plan, and into the company pension, the Charlotte-based bank disregarded "anti-cutback" rules, which disallow an employer from reducing employees' accrued benefits.
"The bank is in administrative proceedings with the IRS in an attempt to work out a resolution," Bank of America spokeswoman Kelly Saap said. "The bank expects the resolution will not adversely impact the 100%-funded status of the pension plan or participants' earned benefits."
The IRS is auditing BoA tax returns for the pension and 401(k) plans during the period in question.
This September, the bank expects to be in court defending itself against a civil lawsuit pertaining to the 98-99 transfers. The bank also said that new accounting rules that affect the way companies count stock compensation to certain employees.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.