The audit will focus on the company’s pension and 401(k) tax filings from the years 1998 and 1999. These were years in which the company was switching from a 401(k) plan to a cash-balance plan, which is similar to a traditional defined benefit plan, according to the Charlotte Observer.
A class action lawsuit has been brought against the company, alleging that the switch was overly aggressive and that the bank illegally earned profits from the move (See Bank of America Slapped with Cash Balance Lawsuit ). The suit, filed in federal court in Illinois, alleges that the move also violated the Employee Retirement Income Security Act (ERISA).
The company, in the filing, also revealed that a class action suit has been brought against it regarding the same action taken by the recently acquired FleetBoston Financial Corp. The suit, brought in federal court in Connecticut, alleges ERISA violations regarding the switch to a cash balance plan while failing to inform employees that the move would reduce benefits (See One Bad Apple ).