(SDB) Clients - MyMerrill.com

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M470739470
Attention Self-Direct Brokerage (SDB) Clients
Notification of Additional Sweep Option Now Available
As of November 11, 2013, you will be able to select the Merrill Lynch Bank Deposit Program
(MLBD Program) as an alternative sweep option for your Self-Direct Brokerage (SDB) account
held within your qualified retirement plan at Merrill Lynch. Your SDB account currently
has one sweep vehicle available, the BIF Money Fund, which receives daily deposits of any
free cash that is not applied toward the payment of pending securities transactions, or
other charges. Please refer to page 4 for information regarding the BIF Money Fund. As of
November 11, 2013, you may choose the MLBD Program as your sweep option or make
future changes in your SDB account by contacting the Retirement Benefit Contact Center
(RBCC) at 1-866-218-INFO (4636) or your Financial Advisor. If you do not contact the RBCC or
your Financial Advisor, your current sweep option will not change.
How the MLBD Program Works
• Through the MLBD Program, available cash balances in your SDB account will be
automatically deposited or “swept” into bank deposit accounts at Federal Deposit
Insurance Corporation (FDIC) insured depository institutions affiliated with Merrill
Lynch, FIA Card Services, N.A. (FIA) and Bank of America California, N.A. (BA-CA).
• Available cash balances of $1 or more in your SDB account and net proceeds from
various transactions (such as the sale of securities), minus debit transactions, will be
automatically swept into the MLBD Program on the business day after available cash
balances are credited to your SDB account.
○ Available cash balances in your SDB account will be swept to deposit accounts
at FIA, up to $246,000 (the standard maximum FDIC deposit insurance
amount is currently $250,000 per depositor, per ownership category, per
bank). Additional available cash balances will be swept in the same manner by
Merrill Lynch to BA-CA, until balances at BA-CA reach $246,000. Both FIA and
BA-CA are affiliates of Merrill Lynch. Merrill Lynch will make this deposit on
your behalf without reference to any other amounts you may have on deposit
with FIA.
○ If your balances at BA-CA reach $246,000, subsequent available funds will
then be deposited to FIA, even if the amounts then deposited in FIA through
the MLBD Program exceed $250,000.
• Redemptions to the sweep account will be automatically made to cover account
level activity.
• Sweep account activity will be shown on your monthly SDB statements, and you will
not receive a separate confirmation each time funds are deposited into or withdrawn
from the MLBD Program.
While Bank of America, N.A. (BANA) is also a bank that is affiliated with Merrill Lynch, BANA does not
currently participate in the MLBD Program.
Interest Rate and Yields
The MLBD Program is a tiered offering, and your SDB account will receive the MLBD Program
Tier 4 rate, the highest available rate at any given time. Rates and other related information
may be found on the table on page 3.
Interest rates for the MLBD Program are determined by FIA and BA-CA, based on economic
and business conditions, and are subject to change daily. Current interest rates on MLBD
Program balances are available at benefits.ml.com (SDB information page within the
Investments tab) or on MyMerrill.com (see the Deposit Account and Money Fund Rates link
at the bottom of each page).
Interest on bank deposit accounts maintained through the MLBD Program will be
compounded on a daily basis and credited monthly. If there is a full withdrawal from the
MLBD Program, interest will be credited to your SDB account on the next business day
following the withdrawal.
FDIC Insurance
Deposit Insurance for Deposits Held Through Employee Benefit Plans
The summary below is provided for the convenience of employee benefit plans and their
participants. Plans and their participants are responsible for monitoring the total amount
of deposits held at any one bank, whether the deposits are held directly at the bank by the
plan or held through an intermediary, such as Merrill Lynch or another securities broker, to
determine the extent of deposit insurance coverage. Merrill Lynch is not responsible for any
insured or uninsured portion of deposits at a bank.
Questions about FDIC Deposit Insurance Coverage. Questions about basic FDIC insurance
coverage may be directed to the RBCC at 1-866-218-INFO (4636) or your Financial Advisor.
Please seek the advice of an attorney concerning the extent of FDIC insurance coverage of
deposits, where appropriate. Information about FDIC coverage may be obtained by contacting
the FDIC, Deposit Insurance Outreach, Division of Supervision and Consumer Affairs, by letter
(550 17th Street, N.W., Washington, D.C. 20429), by phone (877-275-3342 or 800-925-4618
(TDD)), by visiting the FDIC website at www.fdic.gov/deposit/index.html, or by email using the
FDIC’s Online Customer Assistance Form available on its website.
Pass-Through Deposit Insurance for Employee Benefit Plan Deposits. Subject to the
limitations discussed below, under FDIC regulations, a participant’s non-contingent interests
in deposits of one bank held by many types of employee benefit plans are eligible for
insurance up to $250,000 on a “pass-through” basis. This means that instead of the deposits
of one bank held by an employee benefit plan being eligible for only $250,000 of insurance
in total, each employee benefit plan participant is eligible for insurance of his or her noncontingent interest in the employee benefit plan up to $250,000, subject to the aggregation
of the participant’s interests in deposits held through the same or different plans. This
includes IRAs, in some cases, as discussed below under “Aggregation of Employee Benefit
Plan Deposits.” The pass-through insurance provided to an employee benefit plan participant
is separate from the $250,000 federal deposit insurance limit allowed on deposits held by the
individual in different insurable capacities at the same bank (e.g., individual accounts, joint
accounts, etc.).
The types of plans for which deposits may receive pass-through treatment are employee
benefit plans, as defined in Section 3(3) of the Employee Retirement Income Security Act of
1974 (“ERISA”) (including Keogh plans, whether or not they are technically “employee benefit
plans” under ERISA) and eligible deferred compensation plans described in Section 457 of the
Internal Revenue Code of 1986 (the “Code”). For purposes of Section 3(3) of ERISA, employee
benefit plans include defined contribution plans, such as the plan through which you hold
your SDB account.
Defined Contribution Plans. The value of an employee’s non-contingent interest in deposits
of one bank held through a defined contribution plan will be equal to the amount of funds on
deposit attributable to the employee’s account with the plan (such as your SDB account(s)),
regardless of whether the funds on deposit resulted from contributions made by the
employee, the employer, or both.
Portions of deposits at one bank held by an employee benefit plan that are attributable to
the contingent interests of employees in the plan are not insured on a pass-through basis.
Contingent interests of employees in an employee benefit plan are interests that are not
capable of evaluation in accordance with FDIC rules, and are insured up to $250,000 per plan.
Aggregation of Employee Benefit Plan Deposits. Under FDIC regulations, an individual’s
interests in plans maintained by the same employer or employee organization (e.g., a union)
that are holding deposits at the same bank will be insured for $250,000 in the aggregate. In
addition, under FDIC regulations, an individual’s interests in deposits at one bank held by (i)
IRAs, (ii) deferred compensation plans for certain employees of state or local governments or
tax-exempt organizations (i.e., Section 457 Plans), (iii) self-directed “Keogh Plans” of owneremployees described in Section 401(d) of the Code, and (iv) participant-directed defined
contribution plans, will be insured for up to $250,000 in the aggregate whether or not
maintained by the same employer or employee organization.
Benefits of Bank Deposits to Merrill Lynch and its Affiliated Banks
Deposits held at FIA and BA-CA are financially beneficial to Merrill Lynch and its affiliates.
For example, FIA and BA-CA use bank deposits to fund current and new lending, investment
and other business activities. Like other depository institutions, the profitability of FIA and
BA-CA are determined in large part by the difference between the interest paid and other
costs incurred by them on bank deposits, and the interest or other income earned on their
loans, investments and other assets. The deposits provide a stable source of funding for FIA
and BA-CA, and borrowing costs incurred to fund the business activities of FIA and BA-CA
have been reduced by the use of deposits from Merrill Lynch clients. Merrill Lynch will
receive compensation from FIA and BA-CA of up to $65 per year for each Retirement Cast
Management Account that has un-invested cash balances automatically swept to FIA and/or
BA-CA under the MLBD Program. This compensation is subject to change, from time to time,
and Merrill Lynch may waive all or part of it.
As a reminder, the table below outlines the automatic sweep choices available to you. Please
contact the RBCC or your Financial Advisor if you have any questions or would like additional
information, including a copy of the updated SDB Account Agreement (available on or after
November 11, 2013).
Sweep
Option
Annual
Percentage
Yield
as of
9/4/2013
Current
7-Day Yield
%
as of
9/4/2013
FDIC Coverage
Securities Investor
Protection
Corporation (SIPC)
Coverage
n/a
Yes: $250,000
per depositor,
per bank in a
given ownership
category
No
Bank Deposits
Merrill Lynch
Bank Deposit
Program
(MLDB)
0.05%
Performance
FDIC
Coverage
Securities
Investor
Protection
Corporation
(SIPC)
Coverage
No
Yes: Up to the
maximum
Money Market
Mutual Funds
7-Day
Yield (%)
(as of
9/4/2013
BIF Money Fund
0.00
1 Yr
Average
Annual
Total
Return (%)
(as of
6/30/2013)
5 Yr
Average
Annual
Total
Return (%)
(as of
6/30/2013)
10 Yr
Average
Annual
Total
Return (%)
(as of
6/30/2013)
0.00
0.32
1.63
Since Inception Inception
Date
Average
Annual
Total
Return (%)
(as of
6/30/2013)
5.44
SIPC coverage
of
$500,000 per
customer
9/19/77
The performance data contained herein represents past performance, which does not
guarantee future results. Investment return and principal value will fluctuate so that shares,
when redeemed, may be worth more or less than their original cost. Current performance may
be lower or higher than the performance data quoted. For more current fund performance,
including the most recently completed calendar month, please call (800) 626-1960. Keep in mind
that the Fund’s 7-day yield more closely reflects the current earnings of the Fund than the total
return quotations.
All total returns assume the reinvestment of all dividend and capital gain distributions at
net asset value when paid and do not reflect the deduction of any sales charges, as these
charges are not applicable to eligible employer sponsored plans. Had the sales charge been
deducted, results would have been lower than shown. Please note that there are other
charges and expenses that may apply, such as management fees, which are reflected in the
fund’s net investment return.
Investing in money market mutual funds, such as the BIF Money Fund, involves risk. For
performance information regarding the BIF Money Market Mutual Fund, please refer to
the chart on page 3. For more complete information on the BIF Money Fund, including
management fees and other charges and expenses, please consult the prospectuses and,
if available, the summary prospectuses and other comparable documents, which can be
obtained by contacting the RBCC or your Financial Advisor. Investors should consider the
investment objectives, risks, charges and expenses carefully before investing. Investors
should read the prospectuses and, if available, the summary prospectuses carefully
before investing.
About the BIF Money Fund
The BIF Money Fund is currently the sweep vehicle for your SDB account. The BIF Money Fund
is a Money Market Fund which seeks current income, preservation of capital and liquidity by
investing in a diversified portfolio of short-term money market securities. It is SIPC covered up
to the maximum of $500,000 per plan account.
An investment in the BIF Money Fund is not a bank deposit, and is not insured or guaranteed
by Bank of America Corporation or any of its affiliates or by the FDIC or any other government
agency. Although the BIF Money Fund seeks to preserve the value of your investment at $1.00
per share, it is possible to lose money by investing in the fund. Please see the prospectuses for
a complete discussion of the risks of investing in the BIF Money Fund.
If you would like to discuss the sweep vehicle you currently use, and this new offer, please
contact the RBCC at 1-866-218-INFO (4636) or your Financial Advisor.
Important Information:
Past performance is not an indication of future performance or success. Yields may vary daily,
are shown for illustrative purposes, are indicative of recent yields as of the date shown, and
are subject to change and availability. The table above does not constitute a recommendation
or solicitation by Merrill Lynch for the purchase or sale of any particular product.
Annual Percentage Yield or “APY” of a bank deposit account is a rate based on monthly
compounding of interest and assumes interest is not withdrawn from the deposit account
and no change to the interest rate for one year. Note that the interest rate (and APY) may
change at any time at the depository bank’s discretion. The depository bank uses the daily
balance method to calculate interest on your deposit account, which applies a daily periodic
rate to the principal in your deposit account each day. Fees may reduce earnings.
The 7-day yield for Money Market Mutual Funds is the simple average of each of the last 7 days’
daily yields. The yield more closely reflects the current earnings of the fund than the total return
performance information. Yields are shown for the 7-day period ending on date shown.
Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner
& Smith Incorporated (“MLPF&S”) and other affiliates of Bank of America Corporation (“BAC”). Banking activities
may be performed by wholly owned banking affiliates of BAC, including Bank of America, N.A., member FDIC.
Brokerage services may be performed by wholly owned brokerage affiliates of BAC, including MLPF&S, a registered
broker-dealer and member SIPC.
Investment products:
Are Not FDIC Insured
Are Not Bank Guaranteed
May Lose Value
Neither Bank of America, N.A., MLPF&S nor their representatives provide tax, accounting or legal advice.
You should review any planned financial transactions or arrangements that may have tax, accounting or legal
implications with your personal professional advisors.
470739PM-0913