Fund Facts  

Inception Date: Jul 17, 2009
Issuer: Bank of America

Description

Program Overview  

One-, three-, and five-year CD Accounts are issued by Bank of America, N.A. (“Bank”), a member of the FDIC, and are available as VantageTrust investment options. CD Account deposits of up to $250,000 are insured by the FDIC, subject to certain limitations. Interest is credited to CD Account balances daily and compounded monthly. Withdrawals prior to the stated maturity date will reduce the annual percentage yield and are generally subject to an early withdrawal penalty. At maturity, interest will cease to accrue, and the entire principal amount and all accrued interest will be invested in the maturity fund selected by the Plan sponsor.

Amounts to be invested in CD Accounts are initially held in the Bank’s Money Market Deposit Account (“MMDA”), until the open investment window closes, typically on the second to last business day of the month. Assets held in the MMDA will earn the Bank’s MMDA rate and cannot be withdrawn until after the assets have been invested in the CD Account. At that time early withdrawal penalties could apply.

Interest Rates: Interest rates applicable to the current open investment window can be obtained on the internet through ICMA-RC’s online Account Access or by contacting Investor Services at 800-669-7400.

Maturity Date: CD Accounts are opened on the first business day following the close of the open investment window, and the maturity date will fall on a future anniversary of that date, based on the term of the CD Account.

CD Account Fees: ICMA-RC’s Annual CD Administrative Fee is assessed against assets invested in CD Accounts and reflected in the interest rate. The administrative fee may be raised or lowered for new CD Accounts but not for existing CD Accounts. No administrative fee is assessed while assets are invested in the MMDA pending investment in CD Accounts.

For 1-year CD Accounts, ICMA-RC’s Annual CD Administrative Fee is 0.60%. For 3-year and 5-year CD Accounts, ICMA-RC's Annual CD Administrative Fee fluctuates with interest rate changes and is equal to half of the gross rate offered by the Bank, with a maximum fee of 0.60%. As such, when the gross rates on newly offered 3-year and 5-year VT CD Accounts are equal to or greater than 1.20%, the annual administrative fee will be 0.60%.

FDIC Insurance: ICMA-RC will limit each participant’s aggregate investment in CD Accounts to an amount less than $250,000. This limit includes principal, accrued interest, future interest, and any previously purchased VantageTrust CD Accounts issued by Countrywide Bank or MBNA. If an individual’s total investment in CD Accounts exceeds the $250,000 limit, ICMA-RC will transfer the excess amounts to the Plan’s designated maturity fund. Note that ICMA-RC can only limit a participant’s aggregate investment in CD Accounts through Plans administered by ICMA-RC.

Withdrawals: Participants can withdraw assets from a CD Account at any time, but withdrawals prior to the maturity date are subject to an early withdrawal penalty equal to 180 days of interest on the amount withdrawn, unless one of the exceptions identified below applies. The interest penalty is calculated as the gross rate of the CD Account (i.e., the net rate plus the Annual CD Administrative Fee).

CD Account assets will generally be excluded from withdrawals from your account (e.g., installment payments, emergency withdrawals, one-time payments), unless all other assets in your account have been exhausted. If you have multiple CD Accounts, and assets must be withdrawn from your CD Accounts to satisfy a withdrawal request, funds will be distributed on a first-in, first-out basis, unless you request otherwise. Note that CD Account balances will not be available as a source for loans.

Exceptions to the Early Withdrawal Penalty:

• The participant is deceased or disabled.
• The participant is judicially determined to be legally incompetent.
• The participant has separated from service with the Plan sponsor.
• The distribution is for any allowable purchase of permissive service credits.
• The distribution is for any allowable distribution of participant rollover account balances or any age 70½ distributions allowable under the Internal Revenue Code, or
• The distribution is required under a qualified domestic relations order.

However, pursuant to Reserve Requirements for Depository Institutions (Regulation D), a federal regulation issued by the Board of Governors of the Federal Reserve with which all financial institutions must comply, all participants eligible for the exceptions identified above, who wish to withdraw assets from the CD Accounts within the first six (6) calendar days of investment, will be subject to a penalty of seven (7) days simple interest, where the interest is calculated as the gross rate of the CD Account (i.e., the net rate plus the Annual CD Administrative Fee) on the amount withdrawn. Supporting documentation may be requested in connection with such withdrawal requests.

Emergency/Hardship withdrawals are NOT eligible for a waiver and will be subject to an early withdrawal penalty.

Transfer Restrictions: Transfers from the VantageTrust PLUS Fund to CD Accounts are prohibited. Assets must be invested outside of the VantageTrust PLUS Fund in a non-competing fund for a period of at least 90 days before being transferred to CD Accounts.

Transfers from your CD Account prior to maturity to another plan administrator will be subject to an early withdrawal penalty.

Other Items:

• CD Accounts are not available in all plans.
• ICMA-RC reserves the right to establish a minimum initial deposit in the future, limit the maximum amount that can be invested on a monthly basis, and/or discontinue making CD Accounts available, and/or begin offering CD Accounts for other maturities at any time.
• ICMA-RC is not able to offer CD Accounts in certain states due to prevailing state regulations.

 

Footnotes

1.

Please read Making Sound Investment Decisions: A Retirement Investment Guide and the accompanying VantageTrust Fund Fees and Expenses document ("Guide") carefully for a complete summary of all fees, expenses, investment objectives and strategies, and risks before investing. For a current Guide, contact ICMA-RC by calling 800-669-7400 or log into your account at www.icmarc.org.