Disclosure and Custodial Agreement Traditional IRA

Traditional Individual Retirement Account | 1

1. inTroDuCTion — pAge 2

Purpose of this Disclosure Statement — page 2

Who can open an IRA — page 2

Revoking your IRA — page 2

2. The role oF merrill lynCh — pAge 2

3. AbouT your irA AnD serviCesWe proviDe — pAge 2

Services for your IRA — page 2

4. DesignATing beneFiCiAries — pAge 3

Types of beneficiaries — page 4

Designating beneficiaries as primary or contingent — page 4

Changes in family status affecting designations — page 4

Tax implications of making a designation — page 4

5. ConTribuTing To your irA — pAge 4

Transfers and rollover from another IRA — page 4

Annual contributions limits — page 7

6. ADDiTionAl inFormATion AbouT yourACCounT — pAge 8

Investing your IRA assets — page 8

Prohibited investments and transactions — page 8

Insurance and SIPC Protection — page 9

Losing your IRA’s tax-deferred status — page 9

Sweep arrangements for cash in your IRA — page 9

Tax Communications we’ll send — page 9

7. DisTribuTions From your irA — pAge 10

Required minimum distributions — page 10

Calculating your minimum distributions — page 10

Taking your minimum distributions — page 11

Distributions after your death — page 11

Calculating distributions to beneficiaries — page 11

8. Fees AnD expenses — pAge 12

Custodial fees — page 12

Minimum balance fee — page 13

Account close-out fee — page 13

Other fees and expenses — page 13

9. TAxes AnD penAlTies — pAge 14

Your responsibility to file tax returns and other reports — page 14

Deductible and nondeductible contributions — page 14

Penalty for contributions over the annual limit — page 15

Tax-free distributions for nondeductible contributions — page 15

Taxes on distributions — page 16

Substantially Equal Periodic Payments to avoid penalty — page 16

Penalty for failure to take minimum distribution — page 16

10. WorksheeTs To help you WiTh CAlCulATions — pAge 17

Calculating tax-free distributions — page 17

Active participants: Calculating your tax deduction — page 17

11. glossAry — pAge 18

12. irs ApprovAl — pAge 21

CusToDiAl AgreemenT—pAge 22

reTiremenT AsseT sAvings progrAm—pAge 36

merrill lynCh sTATemenT link serviCe—pAge 43

մեe following pages contain the agreementand disclosures governing your traditional IRAincluding disclosures required by federal law.

Disclosure and Custodial Agreement

Traditional IRA Disclosure Statement

Section 1: Introduction

purpose oF This DisClosure sTATemenT

[1] մեis Disclosure Statement describes the rulesand benefits of your Traditional IndividualRetirement Account (IRA) as well as legal andfederal tax information you should know aboutit. In case there is a discrepancy between thisDisclosure Statement and your CustodialAgreement, the Custodial Agreement is theprimary document governing your IRA.

Who CAn open An irA

[2] You can only open an IRA in an individualcapacity. It cannot be opened under jointownership or by non-individual entities.

[3] To make annual contributions to your IRA, youmust be under age 70½ at the end of the TaxYear and receive taxable compensation. Butthere are no age or compensation restrictionsto make contributions by rollover or directtransfer. See Section 5 for more information.

revoking your irA

[4] You can revoke your IRA and receive acomplete refund of any contributions you’vemade to us by notifying us in writing within 14days from the date this Disclosure Statementwas mailed to you. If your revocation ispostmarked, certified or registered within thisperiod, we’ll return your contributions withoutany deduction for sales commissions,administrative expenses, other fees orfluctuations in market value.

[5] To revoke your IRA, send your writtenrevocation to: Manager, Retirement Plan New Accounts Merrill Lynch, Pierce, Fenner & SmithIncorporated 1400 Merrill Lynch Drive NJ2-140-01-03 Pennington, NJ 08534-4128

[6] Contact your Financial Advisor or ServiceAssociate or call 1-800-MERRILL (637-7455),if you have any questions about revoking your IRA.

Section 2: մեe role ofMerrill Lynch

[7] We’ll follow your instructions for all purchases,sales, transfers, exchanges and otherdisposition of assets. If we don’t receiveinstructions from you, we’ll hold assetsuninvested and contact you in writing at yourlast known address. If we can’t locate youwithin two months, we may invest the cashproceeds in a money market fund or interest-bearing account, if you don’t have a sweeparrangement for cash in your IRA.

[8] While we may discuss investment options for your assets, this does not constituteinvestment advice under the InvestmentAdvisers Act of 1940 and does not serve asthe basis for your investment decisions. Atyour request, and only under a separateagreement, we may provide investmentadvice, but at no time will we act as your taxor legal advisor.

Section 3: About your IRAand services we provide

serviCes For your irA

[9] Your IRA is being established for the solepurpose of providing you and yourbeneficiaries with retirement benefits. An IRAprovides you with a way to save for retirement without payingtaxes until you begin taking distributions (orwithdrawals). Your right to the balance of yourIRA, cannot be forfeited at any time. As a non-bank custodian, we have been approved bythe Internal Revenue Service (IRS) toadminister your IRA, consistent with Section408(a) of the Tax Code.

[10] մեe IRS Publication 590 (or a replacementpublication) contains helpful informationabout your IRA and related tax topics. Visitirs.gov online or contact any IRS office torequest a copy.

2 | Traditional Individual Retirement Account

[11] Your Financial Advisor or Service Associatecan offer you full-service brokerage andinvestment advisory products and services tohelp you manage your account in a way thatsuits your needs.

statement linking[12] You can link multiple Merrill Lynch accounts,

including those with different primary accountholders, and appoint one of those accountholders to receive a single monthly statementand a summary of account information for alllinked accounts. Individual account holdersremain responsible for checking individualstatements, reading notices and directingaccount activity. մեe assets of linked accountsare not commingled with other property,except as permitted by law in a common trustfund or a common investment fund.

[13] Linking some accounts may help you avoidcertain fees and deliver higher interest ratesin the Retirement Asset Savings Program. Seethe Statement Linking Service fact sheet formore information in the Custodial Agreement.

mymerrill.com[14] մեe online service, MyMerrill.com, allows you

to view your IRA balance, monitortransactions, transfer funds and set up alerts.MyMerrilll.com also provides industry-leadingresearch by Bank of America Merrill LynchGlobal Research to help inform your financialdecisions. We can delete or modify any Merrill Lynch website and have the right toterminate your enrollment in the service atany time. Visit www.mymerrill.com or call(800) MERRILL to enroll.

online linking[15] If you enroll multiple accounts in

MyMerrill.com, you can link them into a singleMyMerrill.com account for a consolidated viewand convenient online access to all of youraccount information.

online Delivery of communications[16] When you enroll in Online Delivery, you will

receive an email alert when your statementsor documents are available for viewing online.Your records can be accessed online, wherethey are protected by your password. We will

never email your statements or documents toyou, and we do not include any of yourpersonal or account information in the emailalerts.

[17] Providing access to these documentselectronically on MyMerrill.com will constitute good and effective delivery,regardless of whether you actually access and review the information. We will deliver allcommunications to you electronically. Certaincases may require us to send you papercopies as well. You may revoke your consentto Online Delivery and receive paper copies ofthese documents at any time, by contactingyour Financial Advisor or Service Associate, ormaking your selection online.

merrill lynch Advisory program[18] You may enroll in a Merrill Lynch Advisory

Program and authorize a financialprofessional to make investment decisionsand manage your portfolio, based on criteriayou determine. You will need to sign anadditional agreement to enroll. Fees foraccounts enrolled in an Advisory Program arebased on assets under management. Contactyour Financial Advisor or Service Associate, ifyou have any questions about fees.

Section 4: Designatingbeneficiaries

[19] You can designate in writing a beneficiary toreceive the balance of your IRA upon yourdeath. If you make no designation, thebalance will be distributed to your survivingspouse, if you are married. If you do not havea surviving spouse, the balance will bedistributed to your estate.

[20] You can change your designation at any timeby notifying us in writing. մեe change will notbecome effective, until we receive notice andaccept the change in beneficiary.

[21] All beneficiary designations must becompatible with our administrative andoperational requirements, which may changeat any time.


Types oF beneFiCiAries

[22] A beneficiary can be an individual (e.g., anatural person with a birth date), estate,charity or trust. You can designate multiplebeneficiaries for your IRA. However, specialrules apply for Required Minimum Distribution(RMD) purposes following your death. Forexample, if you want to extend paymentsbeyond five years aer your death, each ofyour designated beneficiaries should be anatural person or a “lookthrough” trust. Also,if all your beneficiaries are natural persons,the oldest will be considered to be yourdesignated beneficiary for RMD purposes (seeDistributions aer your death in Section 7) (USTreasury Regulation 1.401(a)(9)-4).

DesignATing beneFiCiAries As primAryor ConTingenT

[23] You can designate beneficiaries as primary orcontingent:

• Primary beneficiaries will be the first to receivethe balance of your IRA.

• Contingent beneficiaries will receive thebalance of your IRA, only if no primarybeneficiary survives you.

ChAnges in FAmily sTATus AFFeCTingDesignATions

[24] Review your beneficiary designationperiodically to make sure it reflects yourintentions, especially when your family statuschanges (e.g., marriage, divorce, births,adoptions, death of a beneficiary), or during the establishment of estate-planning trusts.

[25] If you are married and designate your spouseas beneficiary but later divorce or annul yourmarriage, your designation will be void,unless:

• մեe decree of divorce or annulmentdesignates your spouse as beneficiary,

• You re-designate your spouse as beneficiary,or

• Such spouse is re-designated to receiveproceeds or benefits in trust for, on behalf of,or for the benefit of your child or dependent.

TAx impliCATions oF mAking ADesignATion

[26] Designating a beneficiary is not generallyconsidered to be a gi subject to federal gitax, even if the designation is irrevocable,since the account owner typically retains theright to direct distributions. Consult your taxadvisor, to better understand the taximplications of beneficiary designations.

Section 5: Contributing toyour IRA

[27] You can make contributions to your IRA in-cash or in-kind (for rollover contributions ortransfers from another IRA or qualifiedretirement plan).

[28] in-cash contributions are those made bycheck, money order or electronic fundstransfer. You can mail checks or money orders to: Merrill Lynch P.O. Box 16001 Newark, NJ 07199

[29] in-kind contributions are non-cash assets likemutual funds and securities currently held atanother financial institution that transfer into your IRA without being liquidated. In-kindcontributions must be compatible with ouradministrative and operational requirements.Certain in-kind contributions (e.g., limitedpartnership interests) can typically onlytransfer into your IRA at specific intervals,such as annually or semi-annually.

[30] You’re responsible for determining theeligibility of your contributions. We won’tknowingly accept contributions made by youor for you that exceed annual limits for anyTax Year. We’ll return excess contributions toyou, if you ask us to do so in writing. (SeePenalty for contributions over the annual limitin Section 9 for more information.)

[31] Assets in your IRA won’t be commingled withother property for any reason, except aspermitted by law in a common trust fund or acommon investment fund.


[32] if this is an inherited irA, you can’t make anycontributions, and the early withdrawalpenalty and minimum distribution rules duringyour lifetime don’t apply. See Distributionsaer your death, in Section 7 which applies.

TrAnsFers AnD rollovers FromAnoTher irA

[33] If you already have another IRA or individualretirement annuity at Merrill Lynch or anotherfinancial institution, you can contribute assetsfrom those funds to your IRA in two ways—direct transfer or rollover. Tax implicationsdiffer between methods, so discuss youroptions with your tax advisor. մեe rulesexplained in this Disclosure Statement forrollovers and transfers into your IRA generallyapply to assets transferred out of your IRA toanother IRA as well.

[34] If you want to contribute assets from aSIMPLE Retirement Account (SRA) and keepthe tax-deferred status of those assets, youmust have held your SRA for at least twoyears, or be exempt from the 25% penalty onpremature SRA distributions.

[35] A direct transfer moves assets from anotherIRA into your Merrill Lynch IRA withoutincurring taxes or penalties. To keep your tax-deferred status, assets must be transferreddirectly between IRA custodians or trustees—you cannot receive assets in your name.Transfers from Roth IRAs won’t be permitted,unless you recharacterize those assets.

[36] A rollover moves assets from anotherretirement account to your IRA with us. Youcan roll over any kind of distribution—cash,securities or other property, as long as it’scompatible with our systems. You can also sell non-cash distributions and roll over theproceeds without paying capital gains tax.

[37] Assets must be rolled over into your IRA within60 days of the date you initially withdrewthem from the transfer IRA or EmployerRetirement Plan (ERP). Any portion of assetswithdrawn but not rolled over (including taxwithholding) will be subject to tax. մեe IRS may waive the 60-day requirement, if youdemonstrate how the delay in rolling over

assets was beyond your ability to control (e.g.,casualty or disaster).

[38] You can roll over distributions from:

• A Traditional IRA

• Your employer’s qualified retirement plan

• A section 457(b) eligible governmentaldeferred compensation plan

• 403(b) annuity plan

• Your deceased spouse’s IRA

• Your SRA, if you’ve participated for at least twoyears

• Your deceased spouse’s qualified retirementplan (If you’re a nonspouse beneficiary, youcan only roll over these distributions into anInherited IRA you control.)

rollovers from another irA[39] You can make only one tax-free rollover of all

or part of a distribution to or from yourTraditional IRA in a one-year period. մեe one-year period begins on the date you receive theIRA distribution, not the date you roll it over.

rollovers from a qualified retirement plan[40] You can roll over assets from a qualified

retirement plan.

[41] If you’re the non-spouse beneficiary of aqualified retirement plan participant, you canroll over such distributions to an Inherited IRAin the decedent’s name that you control.

[42] If you don’t directly roll over eligible rolloverdistributions from a qualified retirement planto an IRA or another qualified retirement plan,the amount will be subject to a mandatory20% federal income tax withholding, plus anyapplicable state or local withholding. To avoidthis withholding, you may want to directly rollover such distributions to your IRA. Ask yourFinancial Advisor or Service Associate for theinformation you need to provide to your planadministrator.

ineligible rollovers from employer retirement

plans[43] We won’t accept certain distributions from

your ERP as rollover contributions to your IRA:

• Substantially equal periodic payments over aperiod of 10 years or longer or measured byyour life or life expectancy


• Required minimum distributions

• Distributions from a designated Roth IRAaccount

• Hardship distributions

• Certain corrective distributions

• Employee Stock Ownership Plan (ESOP)dividends

• Loans treated as deemed distributions

• Payments of certain automatic enrollmentcontributions requested to be withdrawnwithin 90 days of first contributions

• Cost of life insurance paid by the plan

rollovers from a defined benefit pension plan[44] You can roll over a “restricted distribution”

from a defined benefit pension plan. Yourlump-sum distribution may be consideredrestricted if the plan does not have assetsexceeding 110% of its accrued benefits andyou’re one of its 25 most highly paidparticipants.

[45] If you roll over a restricted distribution, youmay be required to:

• Repay a portion if the plan terminates withoutsufficient assets

• Provide security for a possible repayment,including pledging and assigning your IRA.

[46] We’ve designed your IRA to facilitate suchpledges and assignments in this limitedcircumstance. Your Financial Advisor orService Associate can provide your attorneywith the information necessary to do so.

Convert irA contributions to roth irA contribu-

tions[47] You can move assets from an IRA to a Roth

IRA by either direct transfer or rollover, andthis is called a conversion. Conversions willgenerally be treated as rollovers for taxpurposes (except that the conversion istaxable). You’re responsible for determiningthe eligibility of your conversion.

[48] Most rules for rollovers also apply toconversions, but there are a few exceptions,including:

• մեe conversion amount won’t be subject tothe 10% penalty for early withdrawals—except

to the extent that any portion of theconversion was withheld for taxes.

• մեe one-year waiting period for rolloversdoesn’t apply to conversions.

• If your IRA assets were previouslyrecharacterized from a Roth IRA, you mustwait 30 days before reconverting them, andyou may not make two such conversions ofthe same assets in one year.

[49] Once converted, your assets will be subject torules governing Roth IRAs. For tax purposes,the applicable amount distributed from yourIRA in the conversion will be included in yourgross income for the year the conversion tookplace. (See the Calculating tax-freedistributions worksheet in Section 10 for moreinformation.)

[50] Certain IRA distributions can’t be converted toRoth IRA:

• Required Minimum Distributions

• Distributions from an Inherited IRA, unless:

– You’re the sole, spousal beneficiary, treatingthe IRA as your own, or

– You’re a non-spouse beneficiary directlyrolling over assets from a qualifiedretirement plan

recharacterize roth irA conversions as irA

contributions[51] You can direct us or any custodian to

recharacterize a Roth IRA conversion as longas you do so before the tax-filing deadline forthe year you originally made the IRAcontributions. When you request arecharacterization, your custodian willtransfer your Roth IRA contributions (plusearnings) to an IRA.

[52] մեe IRS may grant an extension forrecharacterizing invalid conversions if youprovide sufficient evidence you actedreasonably and in good faith.

[53] You can recharacterize:

• Annual IRA and Roth IRA contributions

• Roth IRA conversions from IRAs and certainemployer retirement plans


[54] You cannot recharacterize:

• Tax-free transfers or rollovers:

– Between IRAs

– Between Roth IRAs

– From an ERP to an IRA

• Employer contributions to Simplified EmployeePension (SEP) IRAs and SRAs

• Contributions for which you’ve taken a taxdeduction

[55] A tax-free transfer or rollover between IRAs orRoth IRAs will not disqualify you fromrecharacterizing an annual or conversioncontributions.

[56] To request a recharacterization, providecomplete and timely instructions tocustodians on each end of therecharacterization. You then must report therecharacterization on your federal tax returnas contributions made to the transferee (orrecipient) IRA or Roth IRA for the year youmade the original contributions.

AnnuAl ConTribuTions limiTs

[57] մեe contributions limits described in thisDisclosure Statement apply to all your IRAs.For example, if you own two IRAs, yourcontributions limit doesn’t double. Your totalmust also include contributions made by youremployer on your behalf (except under SEPand SIMPLE plans).

[58] Until age 70½, you can contribute to your IRAat any time during the Tax Year, and up untilthe tax-filing deadline (generally April 15), notincluding extensions. Contributions will bereported in the calendar year they are made,unless you make contributions betweenJanuary 1 and the tax-filing deadline anddesignate in writing that it’s for the prior TaxYear. We’ll then report it to the IRS as such.Aer reaching the year you turn age 70½, youcan no longer contribute to your IRA.

[59] մեere is a limit to the amount you cancontribute each year that won’t be subject totax or penalty in the year contributed. մեeamount varies based on your age:

Age AnnuAl ConTribuTions limiT

Under 50 $5,500

50 to 70½ $6,500

[60] If your annual compensation is less thanthese limits, you can’t contribute more than100% of your compensation. If yourcompensation, however, is less than yourspouse’s and you file a joint tax return, youmay add your spouse’s compensation inexcess of contributions he or she made toanother IRA or Roth IRA to your compensation.

[61] մեe IRS will sometimes adjust the annualdollar limit for cost-of-living increases (TaxCode 219(b)(5)(D)). Any adjustment will berounded down to the next lower multiple of$500. մեis will not apply to the $1,000portion of the annual contributions limit forindividuals age 50 and over. մեe 2013 limitsare reflected in the above chart. See IRSPublication 590 for the current year limits.

Contributions over the annual limit[62] You can make certain contributions over the

annual limit without penalty, includingrepayments of:

• Qualified Reservist Distributions

• Plan distributions related to a federallydeclared disaster

• Plan distributions related to the Exxon Valdezlitigation

[63] Voluntary nondeductible contributions,“elective” contributions and salary deferralsmade under your employer’s retirement plando not reduce the amount you can contribute,but they may affect your tax deduction (seeSection 9) for IRA contributions.

how irA contributions affect roth irA

contributions[64] Your IRA contributions for a year will reduce

the amount you can contribute to a Roth IRAin the same year. However, your IRAcontributions won’t affect designated Roth IRAcontributions you can make to youremployer’s retirement plan, 403(b) annuityprogram or government 457(b) plan.


Computing your annual contributions limit[65] When computing your annual contributions

limit, your (and your spouse’s, if married)compensation includes taxable amounts youreceive, such as:

• Wages or salary

• Tips

• Professional fees

• Bonuses

• Commissions

• Taxable alimony or separate maintenancepayments (if divorced)

• Net income from a self-employment business,aer deductions, for retirement plancontributions, and one-half of the self-employment tax

• Non-taxable U.S. military service combat payand differential wage payments (Tax CodeSection 3401(h)(2))

[66] Your compensation cannot include amountsnot included in your gross income, such as:

• Deferred compensation

• Disability payments

• Social Security benefits

• Pensions

• Earnings and profits from investments orproperty (such as interest, rents or dividends)

• Foreign-earned income and housingallowances

[67] You can find your taxable compensation onyour Form W-2 or 1099. For Form W-2, deductany “non-qualified plans” distributionsreported in box 11 that were also included inbox 1. If you were employed by the U.S.military, add in the non-taxable combat payreported on your Form W-2.

Section 6: Additional information about youraccount

invesTing your irA AsseTs

[68] You can invest your IRA assets in a range ofinvestment products offered by us or ourAffiliates, including:

• Merrill Lynch money market funds

• Securities traded on recognized exchanges or“over the counter”

• Mutual funds

• Government securities, such as treasury bills

• Annuity contracts

• 1-oz. Gold or Silver Eagle coins from the U.S.Mint

• Option strategies

[69] All investments must be compatible with ouradministrative and operational requirementsand procedures. Ask your Financial Advisor orService Associate for more information aboutthese requirements.

[70] մեe investments you purchase for your IRAmay fluctuate in value and have varying ratesof return, so the future value of your IRAcannot be guaranteed or projected.

[71] Careful consideration should be given to taxadvantaged investments held in your IRA:

• Tax exempt investments, such as municipalbonds, would become taxable as adistribution upon withdrawal from a traditionalIRA, because IRA distributions are taxableregardless of the tax-exempt status ofinvestments held in your account.

• Dividends and earnings on investments inforeign securities and foreign mutual fundsmay be subject to foreign tax withholding. մեewithholdings are oen ineligible for the U.S.foreign tax credit, if the underlying securitiesare held in tax-exempt accounts, includingIRAs. As a result, the effective yield on foreignsecurities and foreign mutual funds held inyour IRA may be lower than the effective yieldof identical investments held in anonretirement account.

• You may find it preferable to hold tax-exemptor foreign investments in a taxable investmentportfolio, if you have one, instead of your IRA.Please consult your tax advisor if you havequestions regarding tax advantagedinvestments and your specific tax situation.

prohibiTeD invesTmenTs AnDTrAnsACTions

[72] You’re prohibited from making certaininvestments, including:


• Investments bought on margin

• Commodities transactions (e.g., futurescontracts)

• Series E and EE U.S. Savings Bonds

• Foreign currency

• Shares of “restricted” stock and stock in mostS corporations

• Real estate

• Investments in life insurance contracts

Certain prohibited investments and transac-

tions result in certain tax

consequences and penalties[73] Prohibited transactions and investments

treated as taxable distributions:

• Pledging your IRA as security for a loan

• Collectibles, including works of art, rugs,antiques, certain metals, gems, stamps, coins(other than those listed above), alcoholicbeverages and certain other tangible property

[74] Prohibited transactions and investments thatcause your IRA to lose tax-deferred status:


• Borrowing from your IRA

• Buying property from your IRA

• Investing in life insurance contracts

insurAnCe AnD sipC proTeCTion

[75] մեe securities and cash we hold in yourtraditional IRA(s) are protected by theSecurities Investor Protection Corporation(SIPC) for up to $500,000 per customer (asdefined by SIPC rules), including $250,000 incash. You may obtain further informationabout SIPC, including the SIPC brochure, viaSIPC’s website at http://www.sipc.org.

[76] In addition, Merrill Lynch has obtained“excess SIPC” coverage from a Lloyd’s ofLondon syndicate. մեis policy provides furtherprotection for each customer (including up to$1.9 million for cash), subject to an aggregateloss limit of $1 billion for all customer claims.Neither SIPC protection nor the additional“excess-SIPC” coverage applies to depositsmade through a bank deposit program(including deposits established through the

Retirement Assets Savings Program (RASP)) orto the other assets that are not securities.Each account held by a separate customer (asdefined by applicable law) is treatedseparately for purposes of the aboveprotection.

[77] SIPC and excess-SIPC coverage does notprotect against market losses. nor does itapply to deposits established through theRetirement Asset savings program (RASP).See the attached RASP fact sheet.

losing your irA’s TAx-DeFerreD sTATus

[78] If your IRA loses its tax-deferred status, yourentire IRA balance (less nondeductiblecontributions) would be included in yourtaxable gross income for that year and subjectto a 10% penalty tax for early withdrawal(unless you’re exempt). Refer to the Taxes ondistributions section in Section 9 for moreinformation.

sWeep ArrAngemenTs For CAsh in your irA

[79] Each business day, available cash balances of$1 or more (in whole dollar amounts only) willbe automatically invested (or “swept”) intoyour primary sweep account in the RetirementAsset Savings Program (RASP). (See theRetirement Asset Savings Program Fact Sheetfor more information.) Cash balances sweptmay include interest income, contributionsreceived or dividends from mutual funds.

[80] You can only have one primary sweep accountfor automatic sweeps of cash balances in yourIRA, but you may be able to set up additionalsweep accounts and make direct investmentsor deposits to them at any time by contactingyour Financial Advisor or Service Associate.

TAx CommuniCATions We’ll senD

[81] For each Tax Year you make contributions,we’ll send a Form 5498 to you (and yourbeneficiary following your death) and the IRSthat reports your IRA valuation as ofDecember 31 and IRA contributionsdesignated for that Tax Year. If you don’t makeany contributions, we won’t send it.


[82] We’ll include your IRA valuation in the year-end statement we send you.

[83] Aer your death, we’ll provide a Form 5498for the year of your death to your executor,upon request. Since any amount reported ona beneficiary’s Form 5498 would not bereported on the estate’s Form 5498, the valueon the estate form will most likely be zero.Your executor can submit a written request for a date-of-death valuation, which we’llgenerally provide within 90 days of receivingthe request.

[84] Aer your death, the total value of your IRAassets will generally be included in your grossestate for tax purposes. However, if yourbeneficiary is either your spouse or a charity,deductions may be allowed.

Section 7: Distributionsfrom your IRA

[85] Any amount you receive from your IRA iscalled a distribution. You can request adistribution of all or part of the assets in your IRA at any time by completing a form.Distributions can be made in the form of asingle sum, installments, or an annuity. Ifyou’re requesting a cash distribution, youmust tell us which assets should be sold togenerate sufficient cash. Contact yourFinancial Advisor or Service Associate if youhave any questions about completing a form.

[86] All distributions from your IRA will be subjectto rules of the Tax Code and the terms of theCustodial Agreement.

reQuireD minimum DisTribuTions

[87] When you reach age 70½—your requiredbeginning date (RBD)—you must begin towithdraw an annual amount from your IRAcalled a required minimum distribution (RMD).

• You have until April 1 of the year aer the yearyou turn age 70½ to take your first RMD.

• Even if you take your first RMD in the yearaer you turn 70½, you’re still required totake your second RMD before December 31that same year.

• You must take your RMD in each followingyear by December 31.

[88] While taking your RMD, you may still withdrawany additional amounts you desire from yourIRA.

[89] No RMD was required for 2009.

CAlCulATing your minimumDisTribuTion

[90] We will typically calculate your minimumdistribution for you, but not for yourbeneficiaries aer your death. We’ll need yourcorrect age and fair market value of your IRA.We’ll use the Uniform Lifetime Table todetermine your distribution period, unless ourrecords show that you qualify for the Joint andLast Survivor Table. Our calculation won’t adjust the value of your IRA for outstandingrollovers, transfers or recharacterizations. SeeIRS Publication 590 to reference the UniformLifetime Table and Joint and Last SurvivorTable.

[91] Even though we typically provide a calculation,you’re ultimately responsible for determiningyour RMD and verifying its accuracy. Tocalculate it yourself, you’ll need the followinginformation:

• Your current age

• մեe current age of your primary beneficiary

• Fair market value of your IRA (includingoutstanding rollovers, transfers andrecharacterization transfers) as of December31 of the preceding year from your year-endstatement or IRS Form 5498

• Distribution period

[92] To find the distribution period, you can useeither:

• Uniform Lifetime Table (If you’re unmarried,you must use this table.)

• Joint and Last Survivor Table, if you meet oneof two requirements:

– Your spouse must, generally, be your soledesignated beneficiary for the entire year, or

– Your spouse is your sole designatedbeneficiary on January 1 of the year and yourdesignated beneficiary changes in that yearbecause you or your spouse dies or youdivorce.


[93] To learn more about RMD calculations,request a copy of the Guide to CalculatingMinimum Distributions from a Traditional IRAfrom your Financial Advisor or ServiceAssociate or call 800-MERRILL (637-7455).

TAking your minimum DisTribuTions

[94] You must notify us when you want to receiveyour RMD. If you have multiple IRAs, you mustmake separate calculations for each IRA, butyou can satisfy your RMD by taking a largerdistribution from any IRA you own.

[95] You can set up a periodic payment plan thatconveniently spreads the distributionsthroughout the year.

[96] As an alternative, you can use the entirebalance of your IRA to purchase an annuitythat makes payments at least equal to yourrequired minimum distributions.

[97] Following your death, your beneficiary issubject to similar regulations and rightsgoverning your IRA, including:

• Calculating the RMD for each IRA

• Satisfying the RMD from one or multiple IRAsof which they’re the beneficiary of the sameIRA owner

• Withdrawing any amount from your IRA in asingle sum, installments or in the form of anannuity, unless you specifically stateotherwise

DisTribuTions AFTer your DeATh

[98] Aer your death, we make distributions tobeneficiaries you’ve designated, regardless ofstate community property law. If you live in astate with community property law, both yourspouse and designated beneficiary must signand submit a written statement authorizing usto make distributions to the spouse instead ofthe designated beneficiary.

[99] For the purposes of calculating the RMD forbeneficiaries, your designated beneficiary willbe the designated beneficiary that survivesyou as of September 30 of the year followingyour death.

[100] RMD aer your death, except for the five-yearrule (see Calculating distributions tobeneficiaries below), must be calculated and satisfied according to the Single LifeTable. Your beneficiary’s RMD must be no less than the amount determined by dividingthe value of your IRA as of December 31 of the preceding year by life expectancy. (SeeCalculating distributions to beneficiariesbelow for more about determining lifeexpectancy.) մեe value of your IRA includesthe value of outstanding rollovers, transfersand recharacterizations to your IRA from otherplans or accounts (Treasury RegulationSection 1.401(a) (9)-9, Q&A-1).

CAlCulATing DisTribuTions TobeneFiCiAries

[101] Beneficiaries will calculate their RMD based on the birth date of your designatedbeneficiary and whether you die before oraer your RBD. մեe Single Life Table (See IRSPublication 590) will be used to calculate yourremaining life expectancy and that of yourdesignated beneficiary, if applicable.

[102] if you die aer age 70½, your IRA balancemust be distributed over the period calculatedusing your life expectancy or your designatedbeneficiary’s life expectancy, whichever islonger.

• If you do not have a designated beneficiary,distributions will be calculated based on yourremaining life expectancy using the TermCertain Method.

• If your designated beneficiary is not your spouse,the Term Certain Method will be used todetermine your designated beneficiary’s lifeexpectancy or your remaining life expectancy.

• If your spouse is your sole beneficiary, yourspouse can roll over the balance of your IRAinto his or her own IRA, or treat your IRA as hisor her own. Your spouse’s life expectancy willbe determined using your spouse’s age eachyear until death.

[103] if you die before age 70½, your IRA balancewill be distributed in one of the following ways:


• If you don’t have a designated beneficiary, theentire balance of your IRA must be distributedby December 31 of the year that contains thefih anniversary of your death (five-year rule).

• If your designated beneficiary is not your spouse,your beneficiary must begin takingdistributions no later than December 31following the first anniversary of your deathbased on your beneficiary’s life expectancyusing the Term Certain Method; otherwise, theentire balance of your IRA must be distributedby December 31 of the year that contains thefih anniversary of your death.

• If your spouse is your sole beneficiary, yourspouse can choose to either:

– Postpone distributions until the date youwould have reached age 70½*, or

– Roll over your IRA balance into his or herown IRA or elect to treat your IRA as his orher own IRA and make the minimumwithdrawals that apply to that IRA.

[104] * Note: If your spouse dies before the date youwould have reached age 70½, distributions ofthe remaining balance of your IRA will be madeto your spouse’s designated beneficiary,beginning by the end of the year following theyear of your spouse’s death. Distributions will be made over the designated beneficiary’sremaining life expectancy using the Term CertainMethod based on the beneficiary’s age as oftheir birthday in the year following your spouse’sdeath (or, if elected by the fih anniversary of the spouse’s death). If your spouse dies aerdistributions begin, the remaining balance ofyour IRA will be distributed over your spouse’sremaining life expectancy based on yourspouse’s age as of their birthday in the year ofyour spouse’s death.

[105] We’ll assume your spousal beneficiary electedto treat your IRA as their own if they make anycontributions, rollovers or transfers to yourIRA or do not take minimum distributions thatwould be required from your IRA.

Section 8: Fees and expenses

[106] We may waive or reduce fees if your IRA isenrolled in certain services or programs weoffer.

If there is insufficient cash in your account, thenassets will be liquidated to collect fees due.We reserve the right to liquidate assets in theIRA to cover fees, purchases and otheradministrative expenses if there areinsufficient cash/money market fundsavailable to cover those amounts.

Custodial fee Up to 0.25% of net

assets (At least $50

per year, but not

more than $100 per

year)

Minimum balance fee Up to $15 per

quarter

Account close-out fee Up to $95

CusToDiAl Fees

[107] In the first year aer opening your IRA, you’llpay the custodial fee in the quarter followingyour account opening. Aer that, you’ll paycustodial fees annually in your “anniversaryquarter” (or the calendar quarter containingyour account-opening anniversary date). Ifyour IRA has not been funded in the quarterfollowing your account opening, we’ll valueyour account as of the last day of the quarterin which your IRA is funded to determine yourfirst year annual custodial fee.

[108] Your annual custodial fee will be 0.25% of theasset value of your IRA. You’ll pay at least $50per year, but not more than $100. We’ll value your IRA at the end of the quarter precedingyour anniversary quarter to determine yourfee. For example, if your account openinganniversary date is February 10, we use theasset value of your IRA on the last businessday of December.

[109] You can tell your Financial Advisor or ServiceAssociate how you wish to pay the custodialfee (and Advisory Program fees, if applicable):


• Direct debit from your IRA (if permitted by law)

• Transfer from another Merrill Lynch account

• Personal check

[110] If you pay the fee before it’s charged to your IRA, the amount may be tax deductible.However, once the fee is debited directly from your IRA, you can’t reimburse your IRAfor the fee.

[111] We can change the available paymentmethods and timing of custodial fees at anytime.

minimum bAlAnCe Fee

[112] You can avoid paying the minimum balancefee if:

• Your household’s aggregate accounts have abalance of $20,000 or more in assets

• Your household’s accounts hold at least$5,000 in mutual funds (not including moneymarket mutual funds), or

• Any accounts in your household are enrolledin the Mutual Fund Advisor program.

[113] “Household” means Merrill Lynch accountswith the same mailing address.

[114] If you don’t meet these requirements, a $15fee will be deducted from your IRA on the firstbusiness day of each calendar quarter, notbilled separately. մեis fee will not apply untilone year from the date the first account in thehousehold has been established.

[115] մեe minimum balance fee will only be chargedto one account in the household. If yourhousehold has more than one eligibleaccount:

• Cash Management Accounts will be chargedbefore Individual Investor Accounts.

• Individual Investor Accounts will be chargedbefore any IRA.

[116] If your household has more than one of thesame account type, the one with the highestasset value on the valuation date will becharged.

valuation of accounts to assess minimum

balance[117] We’ll value your accounts on the last Friday

of each calendar quarter, based on the longmarket value of securities and depositbalances with the Depository Institutions, less any outstanding amounts you owe us orour Affiliates.

[118] մեe total balance from the following accounttypes and service enrollments will determineyour aggregate household account value:

• Cash Management Account®

• Consults® program and other AdvisoryProgram products

• Merrill Edge® self-directed accounts

• Merrill Lynch Education Savings Accounts®

• Section 529/NextGen

• Retirement accounts — IRA, Rollover, RothIRA, SEP IRA and SIMPLE IRA

[119] մեe following account types and serviceenrollments will be used in the valuation, butwon’t be charged the minimum balance fee:

• Consults® and other managed products

• Merrill Edge® self-directed accounts

• Merrill Lynch Education Savings Accounts®

• Section 529/NextGen

• SEP IRA and SIMPLE IRA

• Stock option exercise accounts

ACCounT Close-ouT Fee

[120] If you close or transfer your IRA, you’ll pay aone-time fee of up to $95. մեis fee will becharged to your IRA in addition to any pendingcustodial fees you owe.

oTher Fees AnD expenses

[121] Your IRA may be charged other routine feesand expenses, including:

• Asset-based fees

• Brokerage commissions

• Sales charges

• Late fees for past-due balances

• One-time review fee for each specialinvestment (e.g., nonpublicly tradedsecurities)

• Annual maintenance fee for each specialinvestment


Section 9: Taxes andpenalties

[122] Your IRA gives you the ability to takeadvantage of certain federal income taxdeductions for contributions you make towardretirement savings.

[123] Additionally, any gains and income on assetsin your IRA will not be subject to income taxuntil distributed to you. However, certaininvestments (e.g., limited partnerships) maygenerate unrelated business income that maybe taxable in the year earned regardless ofwhether you made withdrawals from your IRA.

[124] մեe tax implications of your IRA can be verycomplex, so you should consult your taxadvisor or legal representative about how yourIRA investments, contributions, distributionsand beneficiary designations affect your taxfiling and estate planning. You can also referto IRS Publication 590 (or any replacementpublication).

[125] Specifically, you should consult your taxadvisor about various tax implications,including:

• Timing of distributions to meet your financialneeds

• Calculating tax-free distributions

• Contributing to a Roth IRA instead of aTraditional IRA

• Calculating substantially equal periodicpayments to avoid early withdrawal penalty

• Changing the method you use for calculatingSubstantially Equal Periodic Payments

[126] մեis Disclosure Statement only describes U.S.federal taxes, so you should consult your taxadvisor about your place of residence (e.g.,state, locality or foreign country). For example,the Tax Code may permit certain federal taxdeductions for higher contributions andincome exclusions for certain rollovers, whilecertain states prohibit such deductions andexclusions on your state income tax return.

your responsibiliTy To File TAx reTurns

AnD oTher reporTs[127] You’re responsible for filing your tax return

and any other reports required by federal lawincluding reporting taxable distributions androllovers in the year they were completed.

[128] You must file IRS Form 5329 with your federalincome tax return if you owe:

• 6% penalty for excess contributions

• 10% penalty for an early withdrawal, butdistribution code 1 is not shown in box 7 ofyour Form 1099-R

• 50% penalty for failing to take your RMD

[129] You also must file IRS Form 5329 if you don’towe the 10% penalty tax, but distributioncodes 2, 3 or 4 do not appear in box 7 of yourForm 1099-R, or the Tax code shown isincorrect.

DeDuCTible AnD nonDeDuCTible

ConTribuTions[130] You can take a full tax deduction on your

federal income tax returns for your IRA annualcontributions (but not Roth IRA contributions)as long as neither you nor your spouse is anactive participant in an ERP.

[131] Generally, you’ll be considered an activeparticipant in an ERP if:

• մեe “Pension Plan” box is checked on your (oryour spouse’s) W-2 form,

• You participated in a defined benefit plan,even if you accrued no benefits (unless noparticipants received benefits and the planwas terminated or frozen), or

• You participated in a defined contributionsplan (e.g., SEP, profit sharing, 401(k), moneypurchase or stock bonus) and anycontributions or forfeitures were allocated toyour account.

[132] If your employer made discretionarycontributions to a defined contributions planon your behalf, you’ll be considered an activeparticipant for the year contributions weremade to the plan, not the year for which theywere allocated to your account. If you havequestions, ask your employer about yourstatus as an active participant.


[133] If you or your spouse is an active participant inan ERP, you can still make nondeductible IRAcontributions, but your ability to claim adeduction on your federal tax return may belimited. A nondeductible contributions is thedifference between your maximum annualcontributions limit and the deductible portionof your contributions. (See Annualcontributions limits in Section 5 for moreinformation.)

[134] Use the Active Participants: Calculating YourTax Deduction worksheet in Section 10 todetermine your tax deduction.

[135] Use IRS Form 8606 to report nondeductiblecontributions on your federal income taxreturn. Overstating the amount ofnondeductible contributions may incur apenalty of $100, unless due to reasonablecause.

penAlTy For ConTribuTions over TheAnnuAl limiT

[136] Excess contributions are subject to a 6%penalty, which will be charged every year theexcess remains in your IRA. For example: Ifyou contribute $1,500 to your IRA whenyou’re single and your compensation is only$1,400, your excess contributions is $100.մեe IRS would charge you $6 (or 6% of $100)for each year that excess remains in youraccount. Another example: If you also roll over$50,000 from an employer-sponsoredretirement plan that turns out not to be aqualified plan, the entire $50,000 is excesscontributions. մեe IRS would charge you$3,000 (or 6% of $50,000) for each year suchexcess remains in your IRA.

[137] You can avoid the 6% penalty by:

• Withdrawing the excess and any relatedearnings prior to your taxfiling deadline(including extensions) for the Tax Year inwhich the contributions was made, then

• Including earnings on excess contributions in your gross income for the year thecontributions was made and not deductingany portion of the excess contributions fromyour gross income.

[138] If you don’t correct the excess contributionsby your tax-filing deadline, you can avoidpaying the penalty in subsequent years byeither:

• Removing the excess contributions from yourIRA, or

• Adjusting your contributions for the followingyear(s) to allow for the excess contributions.

[139] If you’ve already taken a deduction for theexcess contributions, you may need to file anamended tax return to reduce or eliminate thededuction. If you’re under age 59½, excesscontributions and related earnings youwithdraw will be subject to the 10% penalty for early withdrawal. You’re responsible for computing the earnings on excesscontributions and indicating the amount on a distribution form we provide.

[140] If your total contributions did not exceed theannual contributions dollar limit (see Section5), then the excess you withdraw is notincluded in your gross income for the Tax Yearfor which the withdrawal is made, unless youdeducted the contributions in the year it wasmade.

[141] մեe same methods will apply to a rollovercontributions above your contributions limit, if you reasonably relied on erroneousinformation provided by your planadministrator to determine the permittedrollover contributions.

TAx-Free DisTribuTions FornonDeDuCTible ConTribuTions

[142] If you ever make nondeductible contributions(or roll over a nondeductible employeecontributions) to any IRA, a portion of thedistribution you take will be tax-free. You’llonly be taxed on a prorated portion of thedistribution. If you’ve not reached age 59½,the taxable portion of your distribution will still be subject to the 10% early withdrawalpenalty. Use the Calculating Tax-FreeDistributions Worksheet in Section 10 todetermine the tax-free portion of yourdistribution.


TAxes on DisTribuTions

[143] IRA distributions (whether attributable tocontributions or earnings) will be taxed asordinary income, in most cases.

[144] Unless you indicate otherwise on thedistribution request form you complete, we’lldeduct federal (and possibly state) incometaxes before paying you.

[145] Some distributions (subject to specific IRSrequirements) you request won’t be subject toincome tax, including:

• Withdrawals of nondeductible contributions

• Tax-free transfers and rollovers to IRAs andcertain employer retirement plans

• Withdrawals to correct excess contributions

• One-time, tax-free, direct transfers to healthsavings accounts

• Certain transfers to spouses’ IRAs as part ofdivorce proceedings

[146] Any distributions made before you reach age59½ attributable to earnings or deductiblecontributions will be subject to ordinaryincome taxes plus a 10% penalty tax, unlessyou qualify for one of the following exceptions:

• You’re totally and permanently disabled.

• You’re unemployed and the distributions don’texceed amounts paid for health insurance(see Health Insurance Premiums in Section11).

• մեe distributions don’t exceed your deductiblemedical expenses.

• մեe distributions don’t exceed your QualifiedHigher Education Expenses for yourself oryour spouse, children or grandchildren (seeSection 11).

• You’re a Qualified First-Time Homebuyer (seeSection 11).

• You take distributions in Substantially EqualPeriodic Payments.

• մեe distribution is a Qualified ReservistDistribution (see Section 11).

• մեe distribution is made by your beneficiary orestate aer your death.

• մեe distribution is a timely removal of excesscontributions.

• մեe distribution is caused by an IRS tax levy.

[147] We report all distributions for the Tax Year onIRS Form 1099-R that we’ll send to you. You’reresponsible for presenting the IRS withdocumentation supporting the reasons for anearly distribution that’s exempt from thepenalty tax. Each of the exceptions describedabove can be complex. You should consultyour tax advisor before requesting suchdistributions.

subsTAnTiAlly eQuAl perioDiCpAymenTs To AvoiD penAlTy

[148] You can avoid the 10% penalty for earlywithdrawals by taking Substantially EqualPeriodic Payments (SEPP):

• Required Minimum Distribution Method

• Fixed Amortization Method

• Fixed Annuitization Method

[149] See Section 11 for more information aboutthese methods.

[150] You must continue taking SEPP under yourchosen method for at least five years or untilage 59½, whichever is a longer period of time,to avoid being assessed the 10% penalty (andinterest). In that time period, you can make aone-time change to the Required MinimumDistribution Method from either of the FixedMethods.

[151] You can discontinue SEPP without penalty ifyou become disabled. Your beneficiary candiscontinue SEPP without penalty aer yourdeath.

penAlTy For FAilure To TAke minimumDisTribuTion

[152] Aer age 59½ you can take distributionswithout penalty, but you’re not required totake required minimum distributions until age 70½. If you fail to take your RMD, youmay be subject to a penalty tax of 50% on thedifference between your required distributionamount and your actual distribution amount.


[153] For example: If your RMD is $10,000 and youonly withdraw $9,000, the penalty is $500:($10,000—$9,000) x 0.50.

Section 10: Worksheetsto help you with calculations

CAlCulATing TAx-Free DisTribuTions

[154] If you make nondeductible contributions (orroll over nondeductible employeecontributions) to any of your IRAs, you wouldbe only taxed on a prorated portion of yourdistribution. To calculate your tax-freedistribution, use this worksheet:

exAmple WorksheeT

Total nondeductible

contributions

in all your IRAs $3,000

Divide by total value

of all your IRAs

(at year end plus

distributions

during the year) ÷ $15,000

Subtotal = 0.2000

Multiply by

distributions (this year) × $2,000

Total tax-free

distribution (this year) = $400

Additional instructions:[155] In the first line, include all nondeductible IRA

and employee contributions through the endof the applicable calendar year, but subtractany distributions that were excluded from yourtaxable income in prior years. See IRS Form1040 and Form 8606 for more detailedinformation.

[156] If you have not reached age 59½, you mayalso be assessed a 10% penalty on thetaxable portion of your distribution (see Taxeson distributions in Section 9).

[157] If your Tax Year is not the calendar year,consult your tax advisor on how to calculateyour tax-free distribution.

[158] IRA distributions are not eligible for either thecapital gains treatment or the special forwardaveraging computation that is available forcertain lump-sum distributions from employer-sponsored qualified retirement plans.

ACTive pArTiCipAnTs: CAlCulATing yourTAx DeDuCTion

[159] If you or your spouse is an active participant inan ERP, follow these steps to calculate howmuch you may deduct:

step 1

Calculate your modified AGI by locating the“adjusted gross income” line on your IRS Form1040 and subtracting:

• IRA deductions

• Foreign earned income exclusions

• Foreign housing exclusions or deductions

• Interest exclusions on U.S. savings bondsused to pay higher education expenses

• Adoption assistance program exclusions

• Deductions for qualified education loaninterest

• Deductions for qualified tuition and relatedexpenses

step 2

Match your modified AGI, filing status, planstatus, and Tax Year against the followingtable. If your modified AGI does not exceed the amount in column (A), you may claim a fulldeduction. If your modified AGI exceeds theamount in column (B), you may not claim anydeduction. If your modified AGI is described incolumn (C), go to Step 3.

If you receive Social Security benefits, use the worksheets in IRS Publication 590 tocalculate your modified AGI and IRAdeduction.


Filing A. Full b. no C.

sTATus DeDuCTion DeDuCTion phAseouT

up To: AT AnD DeDuCTion

over: beTWeen:

Single/

head of $59,000–

household $59,000 $69,000 $69,000

Married –

joint return/

qualifying $95,000–

widow(er) $95,000 $115,000 $115,000

(IRA of active

participant)

Married –

separate

return Not allowed $10,000 0–$10,000

Married –

joint return

(IRA of $178,000 $188,000 $178,000–

nonparticipant) $188,000

[160] մեe modified AGI amounts up to which fulldeductions are permitted will be adjusted bythe IRS for cost of living changes, rounded tothe nearest multiples of $1,000. մեe 2013modified AGI limits are reflected above. SeeIRS Publication 590 (the “What’s New”section) for the current year limits.

step 3

If your modified AGI falls in column (C) (the“phaseout” range), complete the followingworksheet:

exAmple WorksheeT

Applicable dollar amount from column (B) $69,000

Subtract your modified AGI(combined, if married and filing jointly) – $62,000

Subtotal = $7,000

Divide by applicable dollar spread in column (C) ÷ $10,000

Subtotal = 0.7000

Multiply by contibutions (this year) × $5,000

Total tax deduction = $3,500

Additional instructions:[161] You may round up to the nearest $10. For

example, if you determined your deduction is$972, you may deduct $980.

[162] You may claim a $200 minimum deduction,as long as your calculated deduction is morethan $0. For example, if you determined yourdeduction is $120, you may still deduct $200.

[163] If you are married and file a joint tax return,you and your spouse must calculate yourrespective maximum tax deductionsseparately. Add the two results to determineyour joint deduction.

[164] If you are married and file separate returns,you must have a modified AGI of less than$10,000 to claim a partial deduction.However, if you did not live together during theyear and your spouse (but not you) is an activeparticipant in a retirement plan, you mayclaim a full deduction regardless of yourmodified AGI. (See IRS Publication 590).

Section 11: Glossary

Affiliate

A company controlled by, in control of, orunder common control with, Merrill Lynch orBank of America.

Agreement or Custodial Agreement

մեe IRA Custodial Agreement between youand Merrill Lynch as it may be amendedperiodically.

Client relationship Agreement

մեe signatory account-opening agreementbetween you and Merrill Lynch as it may beamended periodically.

Disclosure statement

մեe document that describes your IRACustodial Agreement as it may be amendedperiodically.

employer retirement plan (erp)

An employer-sponsored plan to help you setaside money for your retirement — including a defined benefit plan (which promises aspecified monthly benefit at retirement) and adefined contributions plan (which promises nospecified monthly benefit at retirement, but


instead contributes to the employee’sindividual account, sometimes at a set rate, on the employee’s behalf).

eligible educational institution

Post-secondary educational institutionsoffering credit toward a bachelor’s,associate’s, graduate or professional degreeor another post-secondary credential. Certainproprietary schools and post-secondaryvocational institutions are also eligible toparticipate in U.S. Department of Education student aid programs.

Financial Advisor

Reference to your financial advisor at Merrill Lynch is used interchangeably with afinancial solutions Advisor at Merrill Edge.

Fixed Amortization method

A method by which you calculate yourSubstantially Equal Periodic Payment (SEPP)once, in the first year, and do not recalculate it in subsequent years (i.e., “fixed”). Youamortize your beginning account balanceusing an interest rate not exceeding 120% ofthe federal mid-term rate during either of thetwo months preceding the first payment andthe current year’s life expectancy factorapplicable to you from one of the LifeExpectancy Tables.

Fixed Annuitization method

A method by which you calculate yourSubstantially Equal Periodic Payment (SEPP)once, in the first year, and do not recalculate itin subsequent years (i.e., “fixed”). You divideyour beginning account balance by an annuityfactor derived from an IRS mortality table(based on your life expectancy or the joint andlast survivor life expectancy of you and yourbeneficiary) and an interest rate notexceeding 120% of the federal mid-term rateduring either of the two months preceding thefirst payment.

health insurance premiums

You can take distributions without penalty topay for health insurance premiums, if youhave:

• Received federal or state unemploymentcompensation for 12 consecutive weeks (evenif you received it because you were self-employed),

• Received the distributions during either thesame Tax Year in which you received theunemployment compensation, or the followingyear, and

• Been re-employed for fewer than 60 days.

inherited irA

An IRA maintained for the benefit of adesignated beneficiary of a deceasedindividual (Tax Code Section 408(d)(3)(C)).

investment Advisers Act of 1940

մեe federal law enforced and interpreted bythe Securities and Exchange Commission(SEC) that governs investment advisers, whichis defined as any person or group that makesinvestment recommendations or conductssecurities analysis in return for a fee, whetherthrough direct management of client assets orvia written publications.

merrill lynch

Merrill Lynch, “us,” “we” or “our” meansMerrill Lynch, Pierce, Fenner & SmithIncorporated, a registered broker-dealer andwholly owned subsidiary of Bank of AmericaCorporation.

Qualified First-Time homebuyers

A Qualified First-Time Homebuyer Distributionis one used to pay the costs of acquiring,constructing or reconstructing a principalresidence for you, your spouse, a child,grandchild or ancestor of you or your spouse.You can use the distribution to cover eligibleexpenses, including usual or reasonablesettlement, financing or other closing costs.մեe total lifetime amount that can qualify as a first-time homebuyer distribution from all IRAs and Roth IRAs is $10,000. To qualifyfor this exception:

• You or your spouse can’t have had ownershipinterest in a principal residence in the twoyears prior to the purchase of the new primaryresidence.

• մեe distribution must be used to pay eligibleexpenses or rolled over into your IRA within120 days (in which case you’re not limited toone rollover per year).


Qualified higher education expenses

You can use distributions to pay for QualifiedHigher Education Expenses for a studentattending classes at an Eligible EducationalInstitution including:

• Tuition, fees, books, supplies and equipmentrequired for undergraduate or graduateenrollment or attendance

• Room and board expenses (up to theminimum allowed in calculations for federalaid programs) or the actual cost of studenthousing owned or operated by the EligibleEducational Institution, if higher

մեe amount of your distribution cannot begreater than the balance of your QualifiedHigher Education Expenses aer you subtractall qualified scholarships, certain educationalassistance provided to military veterans andreservists, and other payments foreducational expenses excluded from thestudent’s gross income under federal laws.

Qualified reservist Distribution

A Qualified Reservist Distribution is one madeto a member of a U.S. military National Guardor Reserve or the Reserve Corps of the U.S.Public Health Service who is called to activeduty.

To qualify for this exception:

• մեe call-to-active-duty must have occured aerSeptember 11, 2001 and lasted at least 179days (or an indefinite period).

• մեe distribution must be aer the call-to-active-duty, but before that active duty ends.

You can re-contribute these distributionswithin two years of the end of the active duty,in which you took the distribution. Suchcontributions are not subject to the usuallimitations on annual contributions and arenot tax-deductible.

recharacterize or recharacterization

An election to treat contributions made to one type of IRA as if it had been made to adifferent type of IRA for a taxable year. մեismust be completed before the tax-filingdeadline (including extensions) for the yearyou originally made the IRA contributions.

required beginning Date (rbD)

մեe first day of April following the calendaryear in which you attain age 70½.

required minimum Distribution (rmD)

Method A method by which you recalculateyour Substantially Equal Periodic Paymenteach year. մեis is done by dividing the accountbalance as of the end of the preceding year by the current year’s life expectancy factorapplicable to you (or to you and yourbeneficiary) from one of the Life ExpectancyTables. You must use the same table eachyear for your calculation.

service providers

Persons or entities that Merrill Lynch mayretain to provide services to your Accountunder this Agreement and as described in the Disclosure Statement.

simple retirement Account (srA)

A type of tax-deferred employer-providedretirement plan that allows employees to setaside money and invest it to grow for lateruse. SIMPLE stands for Savings IncentiveMatch Plan for Employees.

simplified employee pension (sep)

Plan A retirement plan that an employer orself-employed individuals can establish. մեeemployer is allowed a tax deduction forcontributions made to the SEP plan andmakes contributions to each eligibleemployee’s SEP IRA on a discretionary basis.

Tax Code

մեe Internal Revenue Code of 1986 and theregulations adopted under it, both asamended.

Tax year

մեe period for which you must report incomeon your federal income tax return. For mostpeople, the Tax Year is the calendar year.

Term Certain method

A method to calculate life expectancy for RMDpurposes, which calculates the life expectancyonce, then subtracts one year eachsubsequent year until death.


Traditional individual retirement Account (irA)

A retirement account, held at either Merrill Lynch or another financial institution,including one under a qualified employer plan.An IRA is not a Roth IRA, SIMPLE RetirementAccount (“SRA”) or Coverdell EducationSavings Account (Tax Code Section 408(a)).

Treasury regulations

մեe U.S. Department of Treasury’s officialinterpretation of the Internal Revenue Code(also known as “Federal tax regulations”). Youcan access Treasury Regulations from theFederal Register online atwww.gpoaccess.gov.

Section 12: IRS approval

[165] մեe Merrill Lynch IRA Custodial Agreement has been approved by the Internal RevenueService. Approval by the IRS is adetermination as to the form, not the merits,of this IRA. �

L-08-14


1. inTroDuCTion — pAge 22

Purpose of this Agreement — page 22

Changes to this Agreement — page 23

Who can enter into this Agreement — page 23

What you can do under this Agreement — page 23

2. The role oF merrill lynCh — pAge 23

Resigning as custodian — page 24

3. AbouT your irA — pAge 24

4. inFormATion you proviDe — pAge 24

Designating beneficiaries — page 24

Types of beneficiaries — page 25

Designating beneficiaries as primary or contingent — page 25

Spousal beneficiaries after divorce or annulment — page 25

Rights of beneficiaries — page 25

5. ConTribuTing To your irA — pAge 25

Annual contributions limits — page 26

Contributions over the annual limit — page 26

6. operATions oF your ACCounT — pAge 26

Investing your IRA assets — page 26

Prohibited investments and transactions — page 27

Losing your IRA’s tax-deferred status — page 27

Communications we’ll send — page 27

7. TAking DisTribuTions From your irA — pAge 27

Distributions during your lifetime — page 28

Calculating your minimum distributions — page 28

Taking your minimum distributions — page 28

Purchase an annuity to take minimum distributions — page 28

Distributions after your death — page 29

Calculating distributions to beneficiaries — page 29

8. Fees AnD expenses — pAge 30

9. limiTATion oF our liAbiliTy — pAge 30

10. AbouT This AgreemenT — pAge 30

Non-assignability — page 30

Inurement to beneficiaries and successors — page 30

Governing Law — page 30

Broadcort IRA — page 30

11. hoW merrill lynCh hAnDles DispuTes — pAge 31

Disputes between you and Merrill Lynch — page 31

Other matters involving your IRA — page 32

Section 1: Introduction

purpose oF This AgreemenT

[1] մեis Custodial Agreement (“Agreement”)governs the Individual Retirement Accountyou opened under the Client RelationshipAgreement and describes the custodialresponsibilities of Merrill Lynch, Pierce, Fenner& Smith Incorporated, a registered broker-dealer and wholly owned subsidiary of Bank ofAmerica Corporation.

Definitions[2] IRA refers to a traditional individual retirement

account, held at either Merrill Lynch oranother financial institution, including oneunder a qualified employer plan. An IRA is nota Roth IRA, SIMPLE Retirement Account(“SRA”) or Coverdell Education SavingsAccount (Tax Code Section 408(a)).

[3] Typically, “you” and “your” refer to the personfor whom your IRA has been established. Butother situations may occur when “you” and“your” refer to someone else:

• Aer your death, “you” and “your” refer toyour beneficiaries.


Disclosure and Custodial Agreement

Traditional IRA Custodial Agreement

• If this IRA is an Inherited IRA, “you” and “your”refer to the deceased individual, not thedesignated beneficiary of the deceased.

• If you appoint a third party to direct yourinvestments, “you” and “your” also refer tothat third party with respect to investmentdecisions, but not account ownership orcontributions.

[4] “Merrill Lynch,” “we,” “our” and “us” refer toMerrill Lynch, Pierce, Fenner & SmithIncorporated, a registered broker-dealer andwholly owned subsidiary of Bank of AmericaCorporation.

Note: Terms with initial caps (e.g., Tax Code) usedin this Agreement are defined in the glossary atthe end of the Disclosure Statement. Headingsand subheadings contained in this Agreementare for reference purposes only and will not inany way affect the meaning or interpretation ofthis Agreement.

ChAnges To This AgreemenT

[5] We may change this Agreement at any time. Ifwe do, we’ll notify you of the changes andtheir effective dates.

Who CAn enTer inTo This AgreemenT

[6] You can only open an IRA in an individualcapacity. It cannot be opened under jointownership or by non-individual entities.

[7] To make annual contributions to your IRA, youmust be under age 70½ at the end of the TaxYear and receive taxable compensation. Butthere is no age or compensation restrictionsto make contributions by rollover or directtransfer. See Section 5 for more information.

WhAT you CAn Do unDer ThisAgreemenT

[8] Unless stated otherwise in this Agreement,you can instruct us to take certain actions,including:

• Add, change or remove services described inSection 3 of the Disclosure Statement

• Purchase, sell, exchange, transfer orotherwise dispose of assets

• Reinvest proceeds from your investments

• Place your assets in any investmentalternatives we offer

[9] You are responsible at all times for directingthe investment of assets in your IRA. You canappoint a third-party investment adviser orother person to act as your representativewith authority to direct investments in yourIRA. We will follow the direction of theappointed third party if:

• You submit a signed copy of the agreementbetween you and the third party that specifiesthe third party’s ability to act on your behalfand direct your investments;

• We find the agreement with the third partyacceptable; and

• We do not object to acting on the third party’sdirection, which we may do at any time for anyreason.

Section 2: մեe role ofMerrill Lynch

[10] Under this Agreement, we will, among otherthings:

• Hold your IRA assets, including an annuity, inour custody

• Follow your instructions for all purchases,sales, transfers, exchanges and otherdisposition of assets

• Enter into relationships on your behalf withService Providers to carry out yourinstructions

• Open subaccounts for permitted investmentpurposes

• Follow your written instructions for votingproxies and exercising other rights ofownership

• Automatically deduct any IRA fees orexpenses you owe us from your IRA, unlesspaid by you directly

• Keep accurate records of all your IRAtransactions

[11] Keep in mind that you have discretion overthe assets in your account. Without specificinstructions from you, we will not invest yourIRA assets or exercise certain rights. We won’tbe responsible for any investment losses orconsequences resulting from our failure to act.


resigning As CusToDiAn

[12] If we ever resign as custodian, we’ll notify youin writing at your last known address 30 daysin advance of our resignation. In our notice,we may designate a successor custodian(including one affiliated with us), but you canselect your own successor custodian by givingus written instruction to transfer your IRAassets to another IRA custodian or trustee. Inthe event no successor custodian isdesignated, we can distribute your IRAbalance to you in a single payment.

[13] In the unlikely event the IRS disqualifies usfrom acting as custodian, you must appoint asuccessor custodian. If you don’t, we’llappoint one for you. We’ll transfer your IRAbalance aer we receive the successorcustodian’s written acceptance ofappointment.

Section 3: About your IRA

[14] An IRA provides you with a way to save forretirement without paying taxes until you needthe funds you’ve saved. Your IRA balancecannot be forfeited at any time. Contributionsyou make to your IRA may be fully or partiallydeductible, depending on your circumstances.

[15] Your IRA will be established when we acceptyour first deposit. If your IRA isn’t establishedin accordance with our administrativeprocedures, we have the right to reject yourIRA.

[16] Your IRA is being established for the exclusivebenefit of providing you and your beneficiarieswith retirement benefits. Your IRA will befunded by annual regular contributions,qualifying rollover contributions from anotherIRA or qualified employer plan, certainrollovers or transfers from an SRA, or benefitsunder your employer’s Simplified EmployeePension (SEP) plan (Tax Code Sections 408(a)and 408(k)).

[17] You may choose to link accounts toconsolidate account statements or for anyother purpose. (See Section 3 of the

Disclosure Statement for more informationabout our Statement Linking Service.)However, the assets of your IRA will not becommingled with other property, except aspermitted by law in a common trust fund or acommon investment fund.

Section 4: Informationyou provide

[18] We use the information you provide toestablish your IRA. Accurate information helpsus to best serve your brokerage needs andmeet our legal reporting requirements. Pleasenotify us promptly if there’s a change in yourinformation. You have 60 days aer we sendyou a notice verifying the change to correctany errors. We’re not responsible for anyconsequences resulting from inaccurateinformation, if you fail to report it. We mayshare information obtained about you with ourBank of America affiliated companies forreasonable business purposes. (See theConsumer Privacy notice for more informationabout how we share your information).

DesignATing beneFiCiAries

[19] Before your death, you must designate inwriting at least one primary beneficiary toreceive the balance of your IRA aer yourdeath. If you make no designation, thebalance will be distributed to your survivingspouse or your estate, if no spouse survivesyou. If you designate a trust or your estate asbeneficiary, we will make distributions to thetrustee or executor. However, the trustee orexecutor can direct us in writing to makedistributions to beneficiaries of the trust orestate.

[20] Once we accept your designation, it willgovern distributions from your IRA aer your death. You can limit thedistributions taken by your beneficiaries, butthe amounts you specify must at least equalminimum distributions described in Section 7of this Agreement.


[21] All beneficiary designations must becompatible with our administrative andoperational requirements, which may changeat any time. You can change your designationat any time by notifying us in writing. մեechange will not become effective until wereceive notice and accept the change.

Types oF beneFiCiAries

[22] A beneficiary can be an individual (e.g., anatural person with a birth date), estate,charity or trust. You can designate multiplebeneficiaries for your IRA. However, specialrules apply for Required Minimum Distribution(RMD) purposes following your death. Forexample, if you want to extend paymentsbeyond five years aer your death, yourdesignated beneficiaries should be a naturalperson or a “look-thru” trust. Also, if all yourbeneficiaries are natural persons, the oldestwill be considered your designated beneficiaryfor RMD purposes (see Distributions aer yourdeath in Section 7) (US Treasury Regulation1.401(a)(9)-4).

DesignATing beneFiCiAries As primAryor ConTingenT

[23] You can designate beneficiaries as primary orcontingent:

• Primary beneficiaries will be the first to receivethe balance of your IRA.

• Contingent beneficiaries will only receive thebalance of your IRA if no primary beneficiarysurvives you.

spousAl beneFiCiAries AFTer DivorCeor AnnulmenT

[24] If you designate your spouse as beneficiaryand you divorce or annul your marriage, yourdesignation will be void unless:

• մեe decree of divorce or annulmentdesignates your spouse as beneficiary;

• You redesignate your spouse as beneficiary; or

• Such spouse is redesignated to receiveproceeds or benefits in trust for, on behalf of,or for the benefit of your child or dependent.

righTs oF beneFiCiAries

[25] Aer your death, unless you specify otherwise,your beneficiaries will have the same rightsand responsibilities regarding your IRA as youdo, including:

• Designating successor beneficiaries, who willtake precedence over any successorbeneficiaries you designated

• Withdrawing any amount from your IRA in a single sum, installments or in the form of an annuity, unless you specifically stateotherwise

• Calculating minimum distributions for each IRA

• Satisfying the minimum distributions from one or multiple IRAs of which they’re thebeneficiary of the same owner (TreasuryRegulation Section 1.408-8, Q&A-9)

Section 5: Contributing toyour IRA

[26] You can make contributions to your IRA in-cash or in-kind (for rollover contributions ortransfers from another IRA or qualifiedretirement plan).

[27] in-cash contributions are those made bycheck, money order or electronic fundstransfer.

[28] in-kind contributions are non-cash assets likemutual funds and securities currently held atanother financial institution that transfer intoyour IRA without being liquidated. Certain in-kind contributions (e.g., limited partnershipinterests) can typically only transfer into yourIRA at specific intervals, such as annually orsemi-annually. Inkind contributions must becompatible with our administrative andoperational requirements.

[29] We’ll accept the following types ofcontributions:

• Annual contributions made in-cash by you oron your behalf

• Rollovers or transfers of assets (cash,securities or other property) from another IRA


• Rollovers or transfers from certain otherretirement plans (Tax Code Sections 402(c),402(e)(6), 403(a)(4), 403(b)(8), 403(b)(10),408(d) (3) and 457(e)(16))

• Rollovers or transfers from an SRA only aeryou have participated in your employer’sSavings Incentive Match Plan for Employees(SIMPLE) plan for at least two years (Tax CodeSections 408(d)(3), 408(p))

• Recharacterizations from a Roth IRA (TaxCode Section 408A(d)(6))

• SEP contributions (including income deferrals)made by your employer—we’re notresponsible for determining whether the planor the amount of the contributions meets TaxCode requirements (Tax Code Section 408(k))

• Other contributions specifically authorized bythe Tax Code, including repayments of certainplan distributions made on account of afederally declared disaster, and certainamounts received in connection with theExxon Valdez litigation

[30] We cannot accept contributions (includingincome deferrals) made on your behalf underan employer’s SIMPLE plan (Tax Code Section408(p)).

[31] If your IRA is an Inherited IRA, you can’t makeany contributions, and the early withdrawalpenalty and minimum distribution rules duringyour lifetime don’t apply. See Distributionsaer your death in Section 7 of thisAgreement for rules applying to your InheritedIRA (Tax Code Section 408(d)(3)(C)).

AnnuAl ConTribuTions limiTs

[32] Until age 70½, you can contribute to your IRAat any time during the Tax Year, and up untilthe tax-filing deadline (generally April 15), notincluding extensions. Contributions will bereported in the calendar year they are made,unless you make contributions betweenJanuary 1 and the tax-filing deadline anddesignate in writing that it’s for the prior TaxYear.

[33] մեere is a limit to the amount you cancontribute each year that won’t be subject totax or penalty in the year contributed. մեeamount varies based on your age (Tax CodeSection 219(b)(1)(A)):

Age AnnuAl ConTribuTions limiT

Under 50 $5,500

50 to 70½ $6,500

[34] մեese dollar limits do not apply to rollover andSEP contributions. մեe IRS will sometimesadjust the annual dollar limit for cost-of-livingincreases (Tax Code 219(b)(5)(D)). Anyadjustment will be rounded down to the nextlower multiple of $500. մեis will not apply tothe $1,000 portion of the annualcontributions limit for individuals age 50 andover. մեe 2013 limits are reflected in theabove chart. See IRS Publication 590 for thecurrent year limits.

ConTribuTions over The AnnuAl limiT

[35] We will not knowingly accept contributions(including recharacterization contributions)made by you or for you that exceed annuallimits for any Tax Year (Tax Code Sections219(b)(1)(A)). We’ll return excess contributionsto you, if you ask us to do so in writing. SeeSection 9 in the Disclosure Statement formore information about the 6% penalty forexcess contributions.

[36] You can make certain contributions over theannual limit without penalty as permitted bythe Tax Code, including repayments of:

• Qualified Reservist Distributions (Tax CodeSection 72(t)(2)(G)(ii))

• Plan distributions related to a federallydeclared disaster

• Plan distributions related to the Exxon Valdezlitigation

Section 6: Operations ofyour account

invesTing your irA AsseTs

[37] You can invest your IRA assets in a range ofinvestment products offered by us or ourAffiliates, including:

• Merrill Lynch money market funds

• Securities traded on recognized exchanges or“over the counter”


• Mutual funds

• Government securities, such as treasury bills

• Annuity contracts

• 1-oz. Gold or Silver Eagle coins from the U.S.Mint

• Option strategies

[38] See Section 6 of the Disclosure Statement formore information about investing your IRAassets.

prohibiTeD invesTmenTs AnDTrAnsACTions

[39] You’re prohibited from making certaininvestments in your IRA, including:

• Investments bought on margin

• Commodities transactions (e.g., futurescontracts)

• Series E and EE U.S. Savings Bonds

• Foreign currency

• Shares of “restricted” stock and stock in mostS corporations

• Real estate

• Investment in life insurance contracts

Certain prohibited investments and transac-

tions result in certain tax consequences and

penalties[40] Prohibited transactions and investments

treated as taxable distributions:


• Collectibles, including works of art, rugs,antiques, certain metals, gems, stamps, coins(other than those listed above), alcoholicbeverages and certain other tangible property

[41] Prohibited transactions and investments thatcause your IRA to lose tax-deferred status:


• Borrowing from your IRA

• Buying property from your IRA

• Investing in life insurance contracts

losing your irA’s TAx-DeFerreD sTATus

[42] If your IRA loses its tax-deferred status, yourentire IRA balance (less nondeductiblecontributions) would be included in your

taxable gross income for that year and may be subject to a 10% penalty tax for earlywithdrawal. Refer to Section 9 of theDisclosure Statement for more information.

CommuniCATions We’ll senD

[43] As custodian of your IRA, we’ll send youvarious communications, including:

• Notices about your account

• Proxies and proxy solicitations

• Monthly statements

• Year-end statements that include your IRAvaluation

[44] We’ll also send reports to you and the IRS asrequired:

• Annual calendar-year and other reports, which include information about requiredminimum distributions (as prescribed by the Commissioner of the IRS)

• Form 1099-R, which includes all distributionsfrom your IRA (including those resulting fromaccount revocations)

[45] If you find an error in any report we send toyou, you must report it to us within 60 days of the date we sent it to you. Otherwise, we’llconsider it approved, and we won’t beresponsible for its accuracy.

Section 7: Taking distributions from your IRA

[46] Any amount you receive from your IRA iscalled a distribution. You can request adistribution of all or part of the assets in yourIRA at any time by completing our distributionrequest form. Distributions can be made inthe form of a single sum, installment or an annuity. If you’re requesting a cashdistribution, you must tell us which assetsshould be sold to satisfy your request.Distributions before age 59½ are subject to a 10% early-withdrawal penalty. SeeSection 9 of the Disclosure Statement formore information about this penalty.


[47] We can distribute assets to you directly or toyour other non-retirement accounts with us,according to our policies and procedures.

[48] Keep in mind that certain assets (e.g., stocks,bonds and other noncash investments) mayonly be transferred at specific times or takelonger to process, so you should allow extratime for processing such distributions,particularly when planning minimumdistributions.

DisTribuTions During your liFeTime

[49] When you reach age 70½, your RequiredBeginning Date (RBD), you must begin towithdraw an annual amount from your IRAcalled a Required Minimum Distribution(RMD).

[50] You have until April 1 of the year aer the yearyou turn age 70½ to take your first RMD. Ifyou don’t take your first RMD in the year youturn 70½, you’re still required to take yoursecond RMD before December 31 of the nextyear.

[51] You must take your RMD in each followingyear by December 31.

example:

If you turn 70½ in: 2014

մեen your required

beginning date

is April 1 of the

following year: April 1, 2015

You can take your

first RMD: On or before April 1, 2015

Or, if you don’t take

your first RMD in

the year you

turn 70½, In 2015 (the first by

you must take two April 1, and the second

of your RMDs: by December 31)

CAlCulATing your minimumDisTribuTions

[52] Your RMD will be based on Tax Code Section408(a)(6) and the U.S. Treasury Regulations,the provisions of which are incorporated inyour IRA by reference.

[53] Your RMD must be no less than the amountdetermined by dividing the value of your IRAas of December 31 of the preceding year byyour life expectancy. մեe value of your IRAincludes the value of outstanding rollovers,transfers and recharacterizations to your IRAfrom other plans or accounts.

example:

Your RMD = Value of your ÷ Your life

in 2015 IRA as of expectancy

December 31,

2014

[54] To find your life expectancy, you can useeither:

• Uniform Lifetime Table, or

• Joint and Last Survivor Table (if your spouse isyour sole beneficiary and is more than 10years younger than you).

[55] Both tables can be found in IRS Publication590. You can get a copy online (irs.gov) or bycontacting any IRS office.

TAking your minimum DisTribuTions

[56] If you have multiple IRA accounts, you mustmake separate calculations for each IRA, butyou can meet your RMD by taking a largerdistribution from any IRA you own. For furtherinformation on how RMDs are calculated, seeSection 7 of the Disclosure Statement(Treasury Regulation Section 1.408-8, Q&A-9).

[57] You can set up a periodic payment plan thatconveniently spreads the distributionsthroughout the year. To learn more about RMDcalculations, request a copy of the Guide toCalculating Minimum Distributions from aTraditional IRA from your Financial Advisor or Service Associate or call 800-MERRILL(637-7455).

purChAse An AnnuiTy To TAke minimumDisTribuTions

[58] As an alternative, you can use the entirebalance of your IRA to purchase an annuitythat makes payments to satisfy your RMD.Merrill Lynch will act as the custodian forannuities purchased with your IRA funds, andany death benefit under the annuity must be


payable to your IRA for distribution to anybeneficiary designated under your IRA(Treasury Regulation Section 1.401(a)(9)-6).

[59] If you use an annuity to take minimumdistributions, your premiums will be paid withcash balances in your IRA. If cash balances inyour IRA don’t cover the premium due, we’llask if you want us to sell any assets in the IRAto pay the premium. If we’re unable to pay thepremium when due, the annuity will either beplaced on a paid-up basis or the annuitybenefit will be reduced.

DisTribuTions AFTer your DeATh

[60] Aer your death, we make distributions tobeneficiaries you’ve designated, regardless ofstate community property law. If you live in astate with community property law, both yourspouse and designated beneficiary must signand submit a written statement authorizing usto make distributions to the spouse instead ofthe designated beneficiary.

[61] For the purposes of calculating the RMD forbeneficiaries, your designated beneficiary willbe the designated beneficiary that survivesyou as of September 30 of the year followingyour death.

[62] RMD aer your death, except for the five-yearrule, must be calculated and satisfiedaccording to the Single Life Table. Yourbeneficiary’s RMD must be no less than theamount determined by dividing the value of your IRA as of December 31 of the precedingyear by life expectancy. (See “Calculatingdistributions to beneficiaries” below for moreabout determining life expectancy.) մեe valueof your IRA includes the value of outstandingrollovers, transfers and recharacterizations toyour IRA from other plans or accounts(Treasury Regulation Section 1.401(a) (9)-9, Q&A-1).

CAlCulATing DisTribuTions TobeneFiCiAries

[63] Beneficiaries will calculate their RMD basedon the birth date of your designatedbeneficiary and whether you die before oraer your RBD.

[64] if you die aer age 70½, your IRA balancemust be distributed over the period calculatedusing your life expectancy or your designatedbeneficiary’s life expectancy, whichever islonger.

• If you do not have a designated beneficiary,distributions will be calculated based on yourremaining life expectancy using the TermCertain Method.

• If your designated beneficiary is not your spouse,the Term Certain Method will be used todetermine your designated beneficiary’s lifeexpectancy or your remaining life expectancy.

• If your spouse is your sole beneficiary, yourspouse can roll over the balance of your IRAinto his or her own IRA, or treat your IRA as hisor her own. Your spouse’s life expectancy willbe determined using your spouse’s age eachyear until death.

[65] if you die before age 70½, your IRA balancewill be distributed in one of the following ways:

• If you don’t have a designated beneficiary, theentire balance of your IRA must be distributedby December 31 of the year that contains thefih anniversary of your death (five-year rule).

• If your designated beneficiary is not your spouse,your beneficiary must begin takingdistributions no later than December 31following the first anniversary of your deathbased on your beneficiary’s life expectancyusing the Term Certain Method; otherwise, theentire balance of your IRA must be distributedby December 31 of the year that contains thefih anniversary of your death.

• If your spouse is your sole beneficiary, yourspouse can choose to either:

– Postpone distributions until the date youwould have reached age 70½*, or

– Roll over your IRA balance into his or herown IRA or elect to treat your IRA as his orher own IRA and make the minimumwithdrawals that apply to that IRA.

[66] * Note: If your spouse dies before the date youwould have reached age 70½, distributions ofthe remaining balance of your IRA will be madeto your spouse’s designated beneficiary,beginning by the end of the year following theyear of your spouse’s death. Distributions will be


made over the designated beneficiary’sremaining life expectancy using the Term CertainMethod based on the beneficiary’s age as oftheir birthday in the year following your spouse’sdeath (or, if elected by the fih anniversary of thespouse’s death). If your spouse dies aerdistributions begin, the remaining balance ofyour IRA will be distributed over your spouse’sremaining life expectancy based on yourspouse’s age as of their birthday in the year ofyour spouse’s death.

[67] We’ll assume your spousal beneficiary electedto treat your IRA as their own if they make anycontributions, rollovers or transfers to yourIRA or do not take minimum distributions thatwould be required from your IRA.

Section 8: Fees and expenses

[68] You’ll pay all applicable fees and costs,including:

• Custodial fee and expenses

• Legal expenses we incur from mattersinvolving your IRA

• All taxes related to your IRA

• Annuity premiums and taxes, if applicable

• Advisory Program fees, if enrolled

• Costs for calculating and reporting unrelatedbusiness income to the IRS for you, ifapplicable

[69] See Section 8 of the Disclosure Statement formore information about fees and expenses.

Section 9: Limitation ofour liability

[70] We’re not responsible for performing anyduties other than those described in thisAgreement. We’re not responsible forreviewing the assets in your IRA or makingrecommendations on buying, selling ortransferring any assets (unless you’re enrolledin our Advisory Program). We’re also not liablefor failing to act if you don’t give us directions.

[71] While we may discuss investment options for your assets, this does not constituteinvestment advice under the InvestmentAdvisers Act of 1940 and does not serve asthe basis for your investment decisions. Weprovide no advice on the investment, tax orother consequences involving your IRA, unlessprovided under a separate agreement. We’renot liable for any taxes or other consequencesof your investment decisions or directions.

[72] If you direct us to invest your IRA in anannuity, we’re not responsible for its validity orthe failure of any insurance company to makeannuity payments. Additionally, we’re notliable if we fail to purchase an annuity or pay apremium when due, unless caused by grossnegligence or willful misconduct on our part.

Section 10: About thisAgreement

non-AssignAbiliTy

[73] You can’t sell or assign any interest in yourIRA. However, you may be able to transfer yourIRA to a former spouse under a divorce decreeor written agreement related to your divorce.

inuremenT To beneFiCiAries AnDsuCCessors

[74] մեis Agreement will be binding and will remainin effect for the benefit of beneficiaries, heirs,successors and personal representatives ofyours and Merrill Lynch.

governing lAW

[75] մեis Agreement will be governed andinterpreted by the laws of the State of NewYork and applicable federal law, withoutregard to community property laws of anystate. However, determining the interests ofbeneficiaries will be governed by the laws ofthe state of your residence at the time of yourdeath.

broADCorT irA

[76] If your IRA is established through a clearingarrangement for a brokerage firm other than


Merrill Lynch as a “Broadcort IRA,” thefollowing provisions will govern anyinconsistent provisions of this CustodialAgreement:

• We will be the custodian.

• Your IRA will be established through YourBrokerage Firm pursuant to a clearingarrangement with Broadcort.

• You’ll give investment instructions toBroadcort through Your Brokerage Firm.

• You cannot enroll your IRA in the Merrill LynchAdvisory Program (if they become available toBroadcort IRAs, you’ll need to sign anadditional agreement).

• All provisions limiting the duties andresponsibilities of “Merrill Lynch,” “we,” “us”and “our” apply equally to Broadcort.

[77] For purposes of the preceding Broadcort IRAprovisions, the following definitions apply:

• Broadcort means the BroadcortCorrespondent Clearing Division of Merrill Lynch, Pierce, Fenner & SmithIncorporated, which provides certain clearingand administrative services for your IRAinvestments.

• Your Brokerage Firm refers to the firm withwhich you have your primary securitiesaccount relationship and through which yougive investment instructions to Broadcort.

• Merrill, Lynch, Pierce, Fenner & SmithIncorporated will be the custodian of your IRA.

Section 11: How MerrillLynch handles disputes

DispuTes beTWeen you AnD merrill lynCh

[78] մեis Agreement contains a predisputearbitration clause. by signing an arbitrationagreement the parties agree as follows:

• All parties to this Agreement are giving upthe right to sue each other in court,including the right to a trial by jury, exceptas provided by the rules of the arbitrationforum in which a claim is filed.

• Arbitration awards are generally final andbinding; a party’s ability to have a courtreverse or modify an arbitration award isvery limited.

• մեe ability of the parties to obtaindocuments, witness statements and otherdiscovery is generally more limited inarbitration than in court proceedings.

• մեe arbitrators do not have to explain thereason(s) for their award.

• մեe panel of arbitrators will typically includea minority of arbitrators who were or areaffiliated with the securities industry.

• մեe rules of some arbitration forums mayimpose time limits for bringing a claim inarbitration. in some cases, a claim that isineligible for arbitration may be brought in court.

• մեe rules of the arbitration forum in whichthe claim is filed, and any amendmentsthereto, shall be incorporated into thisagreement.

[79] you agree that all controversies that mayarise between us shall be determined byarbitration. such controversies include, butare not limited to, those involving anytransaction in any of your accounts withmerrill lynch, or the construction,performance or breach of any agreementbetween us, whether entered into oroccurring prior, on or subsequent to thedate hereof.

[80] Any arbitration pursuant to this provisionshall be conducted only before the newyork stock exchange, inc., an arbitrationfacility provided by any other exchange ofwhich merrill lynch is a member, or theFinancial industry regulatory Authority, butif you fail to make such election byregistered letter or telegram addressed tomerrill lynch at the office where youmaintain your account before the expirationof five days aer receipt of a writtenrequest from merrill lynch to make suchelection, then merrill lynch may make suchelection.

[81] Judgment upon the award of the arbitratorsmay be entered in any court, state orfederal, having jurisdiction.


[82] no person shall bring a putative or certifiedclass action to arbitration, nor seek toenforce any pre-dispute arbitrationagreement against any person who hasinitiated in court a putative class action orwho is a member of a putative class whohas not opted out of the class with respectto any claims encompassed by the putativeclass action until: (i) the class certificationis denied; (ii) the class is decertified; or (iii) the customer is excluded from the classby the court. such forbearance to enforcean agreement to arbitrate shall notconstitute a waiver of any rights under thisAgreement except to the extent statedherein.

[83] notwithstanding the foregoing, anyagreement or award made as a result of an arbitration proceeding shall not be inviolation of section 408 of the Tax Code and related regulations.

oTher mATTers involving your irA

[84] Disputes between us will be resolved inarbitration, as described above. For all othermatters involving your IRA, we can apply to acourt at any time for judicial settlement. If wedo so, we must give you the opportunity toparticipate in the court proceeding, but wecan also involve other persons. �

L-08-14





Merrill Lynch RetirementAsset Savings ProgramFact Sheet

[1] մեis Fact Sheet describes the RetirementAsset Savings Program offered to certainsponsors and beneficiaries of retirement planaccounts at Merrill Lynch, Pierce, Fenner &Smith Incorporated (“Merrill Lynch”).

AbouT The reTiremenT AsseT sAvingsprogrAm

[2] մեe Retirement Asset Savings Program(“RASP”) is a feature of retirement planaccounts for which Merrill Lynch is custodian(each a “Retirement Plan Account”). մեeseinclude Individual Retirement Accounts, RothIndividual Retirement Accounts, IndividualRetirement Rollover Accounts, SimplifiedEmployee Pension, SIMPLE IRA, Coverdell Edu -cation Savings Accounts and BASIC™ Planaccounts. (մեe Internal Revenue Code doesnot allow RASP to be used in connection withRetirement Selector® Account-403(b)(7)-custodial accounts.)

[3] մեe RASP feature makes available to you amoney market deposit account (“DepositAccount”) for each Retirement Plan Accountwhich is opened on your behalf at one or moreparticipating depository institutions, thedeposits of which are insured by the FederalDeposit Insurance Corporation (“FDIC”), anindependent agency of the U.S. Government.

[4] More than one RASP program may beavailable in connection with differentRetirement Plan Account services. մեesedifferent programs, if any, may bedistinguished as “RASP,” “RASP II,” or “RASPIII,” as appro priate. Except as otherwiseindicated in this Fact Sheet, terms andconditions applicable to the different RASPprograms will be the same.

[5] A minimum deposit of $1 is required to openan account through RASP. However, nodeposit relationship shall be deemed to existprior to the receipt and acceptance of yourfunds by a participating depository institution.

[6] Each deposit into a Deposit Account is a directobligation of the depository institution atwhich the Deposit Account is established andis not directly or indirectly an obligation ofMerrill Lynch. Merrill Lynch does not guaran -tee in any way the financial condition of anyinstitution at which you may establishaccounts through RASP. Upon request, you willbe provided with the publicly availablesummary financial information relating topartici pating institutions. Merrill Lynch is not abank and securities offered by Merrill Lynchare not backed or guaranteed by any bank norare they insured by the FDIC.

[7] Deposits at each depository institution inwhich your funds are deposited through RASPare insured by the FDIC to a maximumamount of $250,000 (inclu d ing principal andaccrued interest) for all qualifying retirementaccount deposits held in the same legalcapacity, except for Coverdell EducationSavings Accounts which are FDIC insured inthe irrevocable trust ownership category. Yourfederal deposit insurance protection takeseffect as soon as a depository institutionreceives your deposit. Any deposits, includingcertificates of deposit (“CDs”), that youmaintain in the same legal capacity as yourRetirement Plan Account directly with aparticular depository institution, through otherMerrill Lynch accounts or through anotherintermediary would be aggre gated with thedeposits maintained in the Deposit Accountsat that institution for purposes of the FDICinsurance limit. Since there may be more thanone depository institution at which you mayestablish a Deposit Account, you may havemore than the Standard Maximum DepositInsurance Amount in federal depositinsurance protection for funds depositedthrough RASP.


[8] You are responsible for monitoring the totalamount of deposits that you hold with onedepository institution, in a single legalcapacity, including deposits maintainedthrough RASP, deposits (including CDs) heldthrough other Merrill Lynch accounts anddeposits held directly with the depositoryinstitution.

how the rAsp feature works[9] Your money is remitted initially for deposit by

Merrill Lynch, acting as your agent, into aDeposit Account at the primary depositoryinstitution. մեe primary depository institutionis Bank of America, N.A. (BANA). մեesecondary depository institution is Bank ofAmerica California, N.A.(BA-CA) (and togetherwith BANA, are the Merrill Lynch AffiliatedBanks, the “Merrill Lynch Banks”) (which willaccept deposits once you exceed $246,000 inthe Deposit Account at the primary institutionas described below).

[10] From time to time, one or more of theparticipating depository institutions may bereplaced with a new institution, including onethat may not have been previously included.Also, new depository institutions may beadded and the depository sequence changed.You will receive notification in advance of suchmovement, inclusion or change before anyfunds you have in a Deposit Account aremoved to another institution. Notification maybe by means of a letter, an entry on yourRetirement Plan Account statement, or thedelivery to you of a new listing of availabledepository institutions.

[11] For each Retirement Plan Account, thefollowing rules apply: Funds up to $246,000are remitted to the Deposit Accountestablished for you at the primary depositoryinstitution, BANA. If the balance in yourDeposit Account at BANA reaches $246,000,then your funds are remitted for deposit in the same manner to a Deposit Accountestablished for you at BA-CA, until the balancein your Deposit Account at BA-CA reaches$246,000. If the bal ance in your DepositAccounts at BA-CA reaches $246,000,

subsequent funds are deposited in yourDeposit Account at BANA, even if the amountsthen deposited in your Deposit Account atBANA exceed $246,000. մեis may cause theamount deposited in BANA through RASP toexceed the Standard Maximum DepositInsurance Amount. All deposits at aninstitution held in the same legal capacity areprotected by federal insurance up to a maxi -mum of the Standard Maximum DepositInsurance Amount. Amounts on deposit atBANA or BA-CA held in the same legalcapacity, including deposits maintainedthrough RASP, in excess of the StandardMaximum Deposit Insurance Amount, will notbe covered by federal deposit insurance.

[12] it is important for you to monitor theamounts of your total deposits with eachparticipating depository institution, so thatyou will know the extent of federal depositinsurance available to you for such deposits(see the following section Additionalinformation on Federal Deposit insurance).

[13] Generally, funds will be transferred to the nextpriority depository insti tution, if any, in thepriority sequence established. However, theremay be exceptions if a depository institution is closed for the day, or if it reaches theaggregate deposit limit it will accept fromMerrill Lynch clients. If a depository institutionin which you have a Deposit Account choosesto no longer make its accounts availablethrough RASP, funds in your Deposit Accountat that institution will be transferred, aernotification to you, to another participatingdepository institution.

[14] Available free credit balances of $1 or morewill be automatically de posited in yourDeposit Account on a daily basis, except forSaturdays, Sundays and legal holidays. Allsuch deposits will be made only in wholedollar amounts.

Transfers and withdrawals[15] Merrill Lynch, as your agent, will make

withdrawals from your Deposit Accounts as


necessary to satisfy any debits in theRetirement Plan Account. However, asrequired by federal regulations, eachdepository institution at which DepositAccounts may be established reserves theright to require seven days prior notice beforepermitting a withdrawal out of an individualaccount.

[16] If you have funds on deposit at both BANA andBA-CA, withdrawals will be made from yourDeposit Accounts in the reverse of the order inwhich deposits are made to the DepositAccounts.

[17] Payment out of your account may be delayed when funds placed in an account onyour behalf had as their original source acheck, dra or similar instrument given toMerrill Lynch. Merrill Lynch may delay thedeposit of funds into a Deposit Account untilfunds submitted to your Retirement PlanAccount have cleared.

[18] մեe Deposit Accounts established at theMerrill Lynch Affiliated Banks are nottransferable.

interest[19] մեe rates paid for each particular RASP

program (e.g., “RASP” or “RASP II”) will beestablished periodically as determined by theMerrill Lynch Affiliated Banks, and otherparticipating depositories. For accountsestablished through RASP, the Merrill LynchAffiliated Banks, and any other participatingdepositories, will set interest rates based oneconomic and business conditions. For someRASP programs (e.g., RASP I), interest rateswill be tiered based upon your relationshipwith Merrill Lynch as determined by the valueof assets in your eligible Retirement PlanAccount(s), Deposit Account(s) and accountslinked through the Merrill Lynch StatementLink service. For these tiered DepositAccounts, deposits of clients in higher AssetTiers (as defined below) generally will receivehigher interest rates than deposits of clientsin lower Asset Tiers.

[20] Your interest rate generally will correspondwith your Asset Tier as deter mined by thevalue of assets in your eligible Retirement

Plan Account(s), Deposit Account(s) andaccounts linked through the Merrill LynchStatement Link service. Retirement PlanAccounts enrolled in the Merrill Lynch One®Investment Advisory Programs, Merrill LynchConsults®, Merrill Lynch Strategic PortfolioAdvisor®, or Merrill Lynch PIA® advisoryprograms will receive the interest rate thatcorresponds to the highest Asset Tier. Formore information on the Merrill LynchStatement Link service, please refer to thedescription in this booklet. մեe following AssetTier levels took effect on September 30,2005:

• $10,000,000 or more

• $1,000,000 to $9,999,999

• $250,000 to $999,999

• less than $250,000

[21] In general, Merrill Lynch will determine yourAsset Tier towards the end of each month (the“Valuation Date”) for application the nextstatement month. մեe valuation proceduregenerally will work like this:

• Your Asset Tier(s) will be based on Merrill Lynch’s determination of the longmarket value of assets and Deposit Accountbalances in your eligible Retirement Plan,including other eligible accounts linkedthrough the Merrill Lynch Statement Linkservice.

• Your Asset Tier(s) will not change until the nextValuation Date even if you open new accountsor link accounts.

• If you have accounts enrolled in the Merrill Lynch Statement Link service on theValuation Date, then the valuation will reflectthe dollar value of assets in those linkedaccounts (except excluded accounts) todetermine your Asset Tier.

• If your accounts are not linked on theValuation Date, then the assets in eachRetirement Plan Account will be valuedindividually to determine your Asset Tier forthat account.

• New Retirement Plan Accounts are not valueduntil the next applicable Valuation Date. In thefirst month, deposit balances in all newaccounts will receive the interest rate thatcorresponds to the Asset Tier that ranges from


$250,000 to $999,999. մեis Asset Tier maybe adjusted, as appropriate, on the nextValuation Date.

[22] For Deposit Accounts established throughRASP II, the Merrill Lynch Affiliated Banks andany other participating depositories will setinterest rates based on economic andbusiness conditions. Interest rates are nottiered.

[23] Without notice, interest rates may changedaily, the interest rate differential betweenAsset Tiers may change, and Asset Tiers mayalso change. To learn the current or newinterest rate for the RASP program offered inconnection with your Retirement PlanAccount, call your Merrill Lynch financialadvisor.

[24] մեe rates of return paid with respect to theDeposit Accounts may be higher or lower thanthe rates of return available to otherdepositors of the participating depositoryinstitution for comparable accounts. Ofcourse, you should compare the terms, ratesof return, required account minimums,charges and other features of a DepositAccount with other accounts and alternativeinvestments before deciding to maintain aDeposit Account.

[25] Interest will accrue on the balances in aDeposit Account from the day funds aredeposited with a participating depositoryinstitution to (but not including) the date ofwithdrawal, and will be compounded daily andcredited monthly.

Client statements[26] All of your transactions will be confirmed and

will appear in chronological sequence on yourMerrill Lynch Retirement Plan Accountstatement. մեe statement will show the totalof your opening and closing Deposit Accountbalances, along with a breakdown of yourDeposit Account balance at each individualdepository institution (if more than onedepository institution is participating in theRASP feature and your funds are deposited inmore than one depository institution). մեestatement will also show interest earned for

the statement period.

your relationship with merrill lynch[27] Merrill Lynch is acting as agent and

messenger for its Retirement Plan Accountclients who establish accounts through theRASP feature. մեe separate accountsestablished by Merrill Lynch on its records onbehalf of its Retirement Plan Account clientswill be evidenced by a book entry on theaccount record of the participating depositoryinstitution. No evidence of ownership, such as a passbook or certificate, will be issued tothe Retirement Plan Account clients whoestablish accounts through RASP, nor will anydepository institution be given the names ofRetirement Plan Account clients. In addition,all transactions are effected through Merrill Lynch, as agent, and not directlybetween a client and the participatingdepository institution.

[28] You may obtain information about yourDeposit Accounts, including the names ofeach depository institution in which yourfunds are currently being deposited, balances,the current interest rate and the names andpriority of the other institutions at whichDeposit Accounts are currently available, bycalling your Merrill Lynch Financial Advisor.

[29] Each participating depository institution, in itssole discretion and without notice, maychange the conditions of or terminate aclient’s Deposit Account. If Merrill Lynch does not wish to continue to act as your agentor custodian with respect to your DepositAccount(s), you may deal directly with eachdepository institution (subject to its rules ineffect at that time) with respect to maintainingsuch an account.

[30] Similarly, if you decide that you no longer wishto have Merrill Lynch act as your agent andmessenger with respect to the DepositAccount estab lished for you at a depositoryinstitution, you may establish a directdepository relationship with the depositoryinstitution (subject to its rules in effect at thattime) with respect to maintaining such anaccount.


[31] մեis may result in the severing of your DepositAccount at that depository institution accountfrom the Retirement Plan Account service.

benefits to merrill lynch[32] մեe Merrill Lynch Affiliated Banks use bank

deposits to fund current and new lending,investment and other business activities. Likemany other depository institutions, theprofitability of the Merrill Lynch AffiliatedBanks is determined in large part by thedifference between the interest paid and othercosts incurred by them on bank deposits, andthe interest or other income earned on theirloans, investments and other assets. մեedeposits provide a stable source of funding forthe Merrill Lynch Affiliated Banks, andborrowing costs incurred to fund the businessactivities of the Merrill Lynch Affiliated Bankshave been reduced by the use of depositsfrom Merrill Lynch clients.

[33] Merrill Lynch receives compensation from theMerrill Lynch Affiliated Banks of up to $85 peryear for each Retire ment Plan Account thathas uninvested cash balances automaticallyswept to the Merrill Lynch Affiliated Banksunder the RASP program. մեe amount of thisfee is subject to change from time to time, andMerrill Lynch may waive all or part of it. Otherthan the Retirement Plan Account fees, nocharge, fee or commission will be imposed onyou with respect to your participation in RASPoffering in connection with your RetirementPlan Account. Merrill Lynch pays a fee tofinancial advisors based on total clientdeposits swept to the Merrill Lynch AffiliatedBanks.

Additional information[34] You will always know where your money is by

referring to the information in the sectiontitled Your relationship with Merrill Lynch, onprevious page, in conjunction with yourRetirement Plan Account statement.Additionally, by calling your financial advisor,you can confirm the name of the depositoryinstitution that has accepted your most recentdeposit. Upon request, you will be providedwith the publicly available information thatMerrill Lynch has relating to the participatingdepository institutions.

ADDiTionAl inFormATion on FeDerAlDeposiT insurAnCe

[35] In the event that federal deposit insurancepayments become necessary, the FDIC isrequired to pay principal plus unpaid andaccrued interest to the date of the closing ofthe relevant depository institution, asprescribed by law and applicable regulations.Since there is no specific time period duringwhich the FDIC must make available suchinsurance payments, you should be preparedfor the possibility of an indeterminate delay inobtaining insurance payments. In addition,you may be required to provide certaindocumentation to the FDIC and to Merrill Lynch before any insurance payoutsare released to you. For example, you may berequired to furnish affidavits and indemnitiesregarding the payout. Merrill Lynch will not beobligated to you for amounts not covered bydeposit insurance and will not be obligated toyou in advance of payment from the FDIC.

[36] Since deposit insurance coverage is based ona customer’s funds on deposit in any onedepository institution, coverage can change iftwo or more institutions where you have fundson deposit merge. In this case, depositsmaintained through RASP continue to beseparately insured for six months from thedate that the merger takes effect. մեereaer,any assumed deposits will be aggregated withyour existing deposits with the acquirer heldin the same legal ownership category forpurposes of federal deposit insurance. Anydeposit opened at the acquired institutionaer the acquisition will be aggregated withdeposits established with the acquirer forpurposes of federal deposit insurance.

special rules for retirement plan Accounts[37] You may have interests in various retirement

and employee benefit plans and accounts thathave deposits in a depository institution. մեeamount of deposit insurance you will beentitled to will vary depending on the type ofplan or account and on whether deposits heldby the plan or account will be treatedseparately or aggregated with deposits in thesame depository institution held by otherplans or accounts. It is therefore important to


understand the type of plan or accountholding the deposit. մեe following sectionsentitled Pass-through deposit insurance forretirement and employee benefit plandeposits and Aggregation of Retirement andEmployee Benefit Plans and Accountsgenerally discuss the rules that apply todeposits of retirement and employee benefitsplans and accounts.

[38] On February 8, 2006, the President of theUnited States signed the Deficit Reduction Actof 2005 (the “Act”), which contains provisionsaffecting federal deposit insurance coverage.մեe principal amount of your deposits held inQualified Retirement Accounts (as definedbelow), plus accrued interest, together withany other deposits held at the issuingdepository institution through such QualifiedRetirement Accounts, are protected by federaldeposit insurance and backed by the U.S.government to a maxi mum amount of$250,000 for the total amount of all suchdeposits held by you in the same ownershipcapacity at the depository institution.Retirement accounts that qualify for thisincreased coverage are: (i) any individualretirement accounts (“IRAs”) described insection 408(a) of the Internal Revenue Codeof 1986, as amended (“Code”); (ii) any eligibledeferred compensation plan described insection 457 of the Code; (iii) any individualaccount plan described in section 3(34) of theEmployee Retirement Income Security Act of1974, as amended (“ERISA”), to the extentthe participants and beneficiaries under suchplans have the right to direct the investmentassets held in the accounts; and (iv) any plandescribed in section 401(d) of the Code, to theextent the participants and beneficiariesunder such plans have the right to direct theinvestment assets held in the accounts (each,a “Qualified Retirement Account”).

pass-through deposit insurance for retirement

and employee benefit plan deposits[39] Subject to the limitations discussed below,

under FDIC regulations, an individual’s non-contingent interest in the deposits of onedepository institution held by certain types ofemployee benefit plans are eligible for

insurance on a “pass-through” basis up to theStandard Maximum Deposit Insuranceamount for that type of plan. մեis means that,instead of an employee benefit plan’sdeposits at one depository institution beingentitled to only the applicable StandardMaximum Deposit Insurance Amount in totalper depository institution, each participant inthe employee benefit plan is entitled toinsurance of his or her interest in theemployee benefit plan’s deposits of up to theapplicable Standard Maximum DepositInsurance Amount per institution (subject tothe aggre gation of the participant’s interestsin different plans, as discussed below). մեepass-through insurance provided to anindividual as an employee benefit planparticipant is in addition to the depositinsurance allowed on other deposits held bythe individual at the issuing institution.However, pass-through insurance isaggregated across certain types of accounts(see the following section, Aggregation ofRetirement and Employee Benefit Plans andAccounts).

[40] A deposit held by an employee benefit planthat is eligible for pass-through insurance isnot insured for an amount equal to thenumber of plan participants multiplied by theapplicable Standard Maximum DepositInsurance Amount. For example, assume anemployee benefit plan that is a QualifiedRetirement Account (i.e., a plan that is eligiblefor deposit insurance coverage up to$250,000 per qualified beneficiary) owns$500,000 in deposits at one institution andthe plan has two participants, one with avested non-contingent interest of $350,000and one with a vested non-contingent interestof $150,000. In this case, the individual withthe $350,000 interest would be insured up tothe $250,000 limit, and the individual withthe $150,000 interest would be insured up tothe full value of such interest.

[41] Moreover, the contingent interests ofemployees in an employee benefit plan andoverfunded amounts attributed to any


employee defined benefit plan are not insuredon a pass-through basis. Any interests of anemployee in an employee benefit plan depositwhich are not capable of evaluation inaccordance with FDIC rules (i.e., contingentinterests) will be aggregated with thecontingent interest of other participants andinsured up to the applicable StandardMaximum Deposit Insurance Amount.Similarly, overfunded amounts are insured, inthe aggregate for all participants, up to theapplicable Standard Maximum DepositInsurance Amount separately from theinsurance provided for any other funds ownedby or attributable to the employer or anemployee benefit plan participant.

AggregATion oF reTiremenT AnDemployee beneFiT plAns AnD ACCounTs

self-directed retirement accounts[42] մեe principal amount of deposits held in

Qualified Retirement Accounts describedabove, plus accrued but unpaid interest, ifany, are protected by FDIC insurance up to amaximum of $250,000 for all such depositsheld by you at the issuing depositoryinstitution together with other accounts heldin the same capacity. մեe FDIC sometimesgenerically refers to Qualified RetirementAccounts as “self-directed retirementaccounts.” Supplementary FDIC materialsindicate that Roth IRAs, self-directed KeoghAccounts, Simplified Employee Pension plans,and self-directed defined contribution plansare intended to be included within this groupof Qualified Retirement Accounts. Accordingly,all accounts that partici pate in RASP, otherthan Coverdell Education Savings Accounts,should qualify for $250,000 of FDIC insurancein the aggregate.

other employee benefit plans[43] Any employee benefit plan, as defined in

Section 3(3) of ERISA, described in Section401(d) of the Code, or eligible deferredcompensation plan under section 457 of theCode, that does not constitute a QualifiedRetirement Account—for example, certainemployer-sponsored profit sharing plans—canstill satisfy the requirements for pass-throughinsurance with respect to non-contingentinterest of individual plan participants,provided that FDIC requirements forrecordkeeping and account titling are met(“Non-Qualifying Benefit Plans”). For Non-Qualifying Benefit Plans, the StandardMaximum Deposit Insurance Amount(“SMDIA”) applies. Under FDIC regulations, anindividual’s interests in Non-Qualifying BenefitPlans maintained by the same employer oremployee organization (e.g., a union) whichare holding deposits at the same institutionwill be insured up to the SMDIA in theaggregate, separate from other accounts heldat the same depository institution in otherownership capacities.

[44] If you have questions about the FDICinsurance coverage of your account, pleasecontact your Merrill Lynch financial advisor or visit the FDIC website at fdic.gov for moreinformation.

[45] FDIC regulations and interpretationsgoverning the availability of federal depositinsurance are subject to change from time totime. Neither BANA nor BA-CA or any otherdepository institution participating in RASP assumes any responsibility with respect to any such changes.

L-SHEET-01-16-8284 | 01/2016


Merrill Lynch StatementLink Service

[1] You may elect to enroll in the Merrill LynchStatement Link service (“Statement Linkservice”). մեis service allows certain types ofaccounts to be “linked” for various purposes,including (1) to receive statements for alllinked accounts in a single package and (2) toestablish your Asset Tier (defined below) forthe Retirement Asset Savings Program(“RASP”).

linking accounts for statement delivery

purposes[2] մեe Statement Link service allows a

Retirement Plan Account client (the “PrimaryAccount client”) to link other Merrill Lynchaccounts, usually in the same household orrelated to a single business, so that themonthly statements for the linked accountsare packaged together and mailed by us tothe Primary Account client’s address, togetherwith a summary page that combines accountinformation from all linked accounts. Eachclient whose account is to be linked with theservice appoints the Primary Account client asagent to receive the client’s monthlystatements and any notices or othercommunications mailed with them. մեe assetsof the linked accounts are not commingledand all of the clients retain control over theirindividual accounts. մեe individual clients alsoremain responsible for verifying the accuracyof their individual statements, for reading anynotices that are mailed with the linkedstatements and for directing the activity intheir individual accounts.

Asset Tiers[3] Interest rates in the RASP may be

tiered based upon your relationship withMerrill Lynch as determined by the value ofassets in your accounts, including DepositAccounts established for you through RASP.For tiered accounts, your interest rate willcorrespond with your Asset Tier as determinedby the value of assets in your account oraccounts linked through the Statement Link

service. Generally, deposits of clients in higherAsset Tiers will receive higher interest ratesthan deposits of clients in lower Asset Tiers.մեe following Asset Tier levels were in effect on September 30, 2005:

• $10,000,000 or more

• $1,000,000 to $9,999,999

• $250,000 to $999,999

• Less than $250,000

[4] Without notice, interest rates may changedaily, the interest rate differential betweenAsset Tiers may change and Asset Tiers mayalso change. Your Asset Tier will be based onMerrill Lynch’s determination of the longmarket value of assets in your Merrill Lynchaccount(s) and deposit balances with theMerrill Lynch Affiliated Banks. In general, yourAsset Tier will be determined by Merrill Lynchtowards the end of each month (the“Valuation Date”) for application the nextstatement month. մեe valuation proceduregenerally will work like this:

• Your Asset Tier(s) will not change until the nextValuation Date even if you open new accountsor link accounts.

• If you have accounts enrolled in the Merrill Lynch Statement Link service onthe Valuation Date, then the valuation willreflect the dollar value of assets in thoselinked accounts (except accounts listed asineligible below) to determine your Asset Tier.

• If your accounts are not linked on theValuation Date, then the assets in eachRetirement Plan Account will be valuedindividually to determine the Asset Tier forthat account.

important considerations for individual retire-

ment accounts[5] You generally may link your Individual

Retirement Account (IRA), IndividualRetirement Rollover Account (IRRA), RothIndividual Retirement Account (Roth IRA),Simplified Employee Pension (SEP), SIMPLERetirement Account (SRA), and CoverdellEducation Savings Account (ESA) with yourother accounts to achieve a higher Asset Tier.Except for a SEP or a SRA, you cannot link anIRA which accepts employer contributions.


[6] You also may link your IRA with IRAs (or otheraccounts) of immediate family members andtheir spouses to achieve a higher Asset Tier. Ifyou want to link IRAs with accounts of otherpersons to achieve a higher Asset Tier, youshould consult your legal or tax advisor.

ineligible accounts[7] For regulatory or other reasons, certain types

of accounts that can be linked for statementdelivery purposes are not included for

determining your Asset Tier. մեese include:Working Capital Management Accounts,Health Savings Accounts and certainretirement accounts including RetirementCash Management Accounts, BASIC accounts,401(k) ac counts (including SIMPLE 401(k)accounts), and Retirement Selector® Accounts(403(b) accounts). For more information onenrolling in this service, please call yourFinancial Advisor or (800) MERRILL. �

L-07-11


Merrill Lynch is the marketing name for Merrill Lynch Wealth Management and Merrill Edge which are made available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”).

Merrill Lynch Wealth Management makes available products and services offered by MLPF&S and other subsidiaries of Bank of America Corporation (“BofA Corp.”). Merrill Edge is the marketing name for two businesses: Merrill Edge Advisory Center,which offers team-based advice and guidance brokerage services; and a self-directed online investing platform.

Investment products:

MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation.

Banking products are provided by Bank of America, N.A., and affiliated banks.Members FDIC and wholly owned subsidiaries of Bank of America Corporation.

Unless otherwise noted, all registered trademarks and trademarks are the property of Bank of America Corporation.

Visa is a registered trademark of Visa International Service Association.© 2016 Bank of America Corporation. All rights reserved.

Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value

209468PM-0116

Documents

Disclosure and Custodial Agreement Traditional IRA