11-K
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 11-K

 

 

 

x ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For fiscal year ended December 31, 2013

 

¨ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 001-133354

 

 

 

A. Fill title of the plan and the address of the plan, if different from that of the issuer named below:

Employees’ 401(k) Savings Plan of

Bank of Montreal/Harris

 

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Bank of Montreal

100 King Street West

1 First Canadian Place

Toronto, Ontario

Canada M5X 1A1

Documents filed as part of this report:

 

  (a) Index to financial statements filed as part of this report:

The Statements of Net Assets Available for Plan Benefits as of December 31, 2013 and 2012, the Statement of Changes in Net Assets Available for Plan Benefits for the years ended December 31, 2013 and 2012 and supplementary information, together with the report thereon of the Independent Registered Public Accounting Firm dated June 23, 2014. The required financial statement schedule is included in the supplementary information referred to above and should be read in conjunction with the above financial statements.

 

  (b) Exhibits:

Exhibit 23 – The consent of George Johnson & Company.

 

 

 


Table of Contents
  EMPLOYEES’ 401(k) SAVINGS
  PLAN OF BANK OF
  MONTREAL/HARRIS
  Financial Statements
  December 31, 2013 and 2012
 


Table of Contents

EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

December 31, 2013 and 2012

 

TABLE OF CONTENTS

 

     Page(s)  

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     1   

FINANCIAL STATEMENTS

  

Statements of Net Assets Available for Plan Benefits

     2   

Statements of Changes in Net Assets Available for Plan Benefits

     3   

Notes to Financial Statements

     4–14   

SUPPLEMENTARY INFORMATION

     15   

Schedule G, Part III—Schedule of Nonexempt Transactions

     16   

Schedule H, Line 4i—Schedule of Assets (Held at End of Year)

     17–18   


Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

June 23, 2014

To the Benefits Administration Committee

BMO Harris Bank N.A.

We have audited the accompanying statements of net assets available for plan benefits of the Employees’ 401(k) Savings Plan of Bank of Montreal/Harris (the “Plan”) as of December 31, 2013 and 2012, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the aforementioned financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2013 and 2012, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets (held at end of year) as of December 31, 2013, and nonexempt transactions for the year then ended, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, as amended. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

/s/ George Johnson & Company

CERTIFIED PUBLIC ACCOUNTANTS

Chicago, Illinois

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Statements of Net Assets Available for Plan Benefits

As of December 31, 2013 and 2012

 

 

     2013      2012  

ASSETS

     

Participant-directed investments (see Notes 2 and 3)

     

Registered investment companies

   $ 382,946,168       $ 321,521,245   

Money market funds

     117,395,367         134,465,091   

Common and collective trusts

     580,905,111         416,416,164   

Common stock–Bank of Montreal

     68,002,999         58,888,213   
  

 

 

    

 

 

 

Total investments

     1,149,249,645         931,290,713   

Cash

     617,297         411,444   

Notes receivable from participants

     18,787,680         16,340,030   

Accrued interest and dividends receivable

     88,886         312,502   
  

 

 

    

 

 

 

Total assets

     1,168,743,508         948,354,689   

LIABILITIES

     

Securities purchased but not paid

     1,545,179         —     

Accrued administrative expenses

     80,380         82,164   
  

 

 

    

 

 

 

Total liabilities

     1,625,559         82,164   
  

 

 

    

 

 

 

Net assets available for plan benefits

   $ 1,167,117,949       $ 948,272,525   
  

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Statements of Changes in Net Assets Available for Plan Benefits

For the Years Ended December 31, 2013 and 2012

 

 

     Participant-Directed Investments  
     2013      2012  

ADDITIONS

     

Contributions

     

Employer contributions

   $ 51,111,191       $ 47,633,789   

Employee contributions

     79,040,182         72,567,427   

Employee rollovers

     6,182,227         3,573,019   
  

 

 

    

 

 

 

Total contributions

     136,333,600         123,774,235   

Interest and dividend income

     8,153,166         12,425,662   

Interest income on notes receivable from participants

     529,427         467,221   

Net realized and unrealized appreciation in fair value of investments (see Note 3)

     168,180,577         94,656,288   
  

 

 

    

 

 

 

Total additions

     313,196,770         231,323,406   
  

 

 

    

 

 

 

DEDUCTIONS

     

Benefits payments to participants

     92,112,304         73,536,283   

Deemed distributions

     1,139,131         878,326   

Administrative expenses

     1,099,911         813,742   
  

 

 

    

 

 

 

Total deductions

     94,351,346         75,228,351   
  

 

 

    

 

 

 

Net additions

     218,845,424         156,095,055   

Net assets available for plan benefits, beginning of year

     948,272,525         792,177,470   
  

 

 

    

 

 

 

Net assets available for plan benefits, end of year

   $ 1,167,117,949       $ 948,272,525   
  

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Notes to Financial Statements

December 31, 2013 and 2012

 

 

NOTE 1 DESCRIPTION OF THE PLAN

The following description of the Employees’ 401(k) Savings Plan of Bank of Montreal/Harris (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.

General

The Plan is a contributory, defined contribution pension plan administered by the Benefits Administration Committee (the Administration Committee) covering all regular full- and part-time employees of BMO Harris Bank N.A. (the Plan administrator) and affiliated companies, as well the U.S. employees of the Bank of Montreal and its subsidiaries. BMO Harris Bank N.A. and the Bank of Montreal are referred to collectively as “the Bank,” and the employees covered by the Plan are referred to collectively as “the Employees.” The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended.

Eligibility

All regular full- and part-time Employees of the Bank, other than temporary or work-study employees, are eligible to begin participation in the Plan on their date of hire. Participants are immediately eligible to receive the Bank’s matching contributions, which are made each pay period.

Administration

Bank of New York Mellon Corporation (Mellon) is the trustee of the Plan.

Contributions

Participants may contribute from 1% to 25% of their pay (as defined) on a pre-tax basis, subject to the annual contribution limits as specified in the Internal Revenue Code of 1986, as amended (the IRC). Participant after-tax contributions are not permitted.

The Bank makes 401(k) matching contributions to the participants’ accounts each pay period, dollar for dollar, up to the first 5% of participants’ annual eligible pay (as defined), to the maximum annual compensation limit permitted by the Internal Revenue Service (the IRS; $255,000 in 2013 and $250,000 in 2012).

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Notes to Financial Statements

December 31, 2013 and 2012

 

 

NOTE 1 DESCRIPTION OF THE PLAN (continued)

 

Contributions (continued)

 

An election made by the participant may provide for an automatic increase either in the amount or rate of his or her 401(k) contributions.

Participant Accounts

Each participant’s account is credited with the participant’s contributions, including eligible rollover contributions, allocations of the employer contributions and plan earnings. Allocations are based on participant earnings or account balances, as defined. Each participant may direct the investment of his or her account balance among the available investment options, in accordance with the provisions of the Plan. A participant shares in the earnings and losses of the investment options in the ratio that his or her account invested in a fund bears to the total of all participants’ accounts invested in that fund.

Vesting

All employee and employer contributions are fully vested at all times.

Benefits

Upon termination of employment, the participant’s account balance will be distributed as directed by the participant in a lump sum, subject to the limitations in the IRC. Retirees aged 55 or older also have the option of receiving the participant’s account balance in a series of installments.

Participant Loans

A participant may borrow from his or her account in accordance with the provisions of the Plan. Under the Plan’s terms, subject to certain restrictions as defined, the Administration Committee may allow a participant to borrow funds from the Plan. A participant may borrow an amount not in excess of the lesser of: (1) $50,000, reduced by the highest outstanding loan balance in the previous 12 months, or (2) 50% of the participant’s account balance. The minimum loan amount is $1,000. A participant can have up to two loans outstanding at any given time. The interest rate charged to the participant is fixed at the prime rate as published in the Wall Street Journal on the last business day of each month. Participants repay such loans with interest through payroll deductions. Principal and interest repayments are allocated to participants’ current investment options.

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Notes to Financial Statements

December 31, 2013 and 2012

 

 

NOTE 1 DESCRIPTION OF THE PLAN (continued)

 

Bank of Montreal Stock Fund

The Plan invests in common stock of the Bank through its Bank of Montreal Stock Fund. The Bank of Montreal Stock Fund may also hold cash or other short-term securities, although these are expected to be a small percentage of the fund.

Participants can invest any percentage of their contributions in the Bank of Montreal common stock. Each participant is entitled to exercise voting rights attributable to the shares allocated to their account and is notified by the Bank prior to the time that such rights may be exercised. The trustee is not permitted to vote any allocated shares for which instructions have not been given by a participant. The trustee votes any unallocated shares in the same proportion as those shares that were allocated, unless the Administration Committee directs the trustee otherwise. Participants have the same voting rights in the event of a tender or exchange offer.

 

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying financial statements of the Plan have been prepared on the accrual basis of accounting.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of changes in net assets during the reporting period. Actual results could differ from those estimates.

Contributions

Employee contributions are recorded in the period that payroll deductions are made from participants. Employer contributions are recorded in the period to which they relate, as designated by the Bank’s management.

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Notes to Financial Statements

December 31, 2013 and 2012

 

 

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Investments

The Plan’s investments are stated at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). See Notes 2 and 3 for further discussion and disclosures related to fair value measurements.

Shares of registered investment companies are valued at quoted market prices, which represent the net asset value (NAV) of shares held by the Plan at the end of the year. Units of common and collective trusts are valued at fair value; the underlying investments consist primarily of securities that are valued at quoted market prices.

Purchases and sales of securities are recorded on a trade-date basis. Gains and losses on sales of securities are based on average costs. Dividends are recorded on the ex-dividend date. Net appreciation includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

Fair Value Measurements

The Plan uses fair value measurements in preparing its financial statements, which utilize several inputs, including those that can be readily observable, corroborated, or are generally unobservable. The Plan utilizes market-based data and valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Additionally, the Plan applies assumptions that market participants would use in pricing an asset or liability, including assumptions about risk.

The measurement of fair value includes a hierarchy based on the quality of inputs used to measure fair value. Financial assets and liabilities are categorized into this three-level fair value hierarchy, based on the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs.

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Notes to Financial Statements

December 31, 2013 and 2012

 

 

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Fair Value Measurements (continued)

 

The various levels of the fair value hierarchy are described as follows:

 

    Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the Plan has the ability to access at the measurement date

 

    Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability

 

    Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement

The use of observable market data, when available, is required in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

Payment of Benefits

Benefits are recorded when paid.

Notes Receivable from Participants

Notes receivable from participants represent participant loans that are recorded at their unpaid principal balance plus any accrued but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. Related fees are recorded as administrative expenses and are expensed when incurred. No allowance for credit losses has been recorded as of December 31, 2013 or 2012. If a participant ceases to make loan repayments and the Plan administrator deems the participant loan to be a distribution, the participant loan balance is reduced and a benefit payment is recorded.

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Notes to Financial Statements

December 31, 2013 and 2012

 

 

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Administrative Expenses

Administrative costs and expenses incurred in the administration of the trust or the Plan are paid from the Plan to the extent determined by the Bank. Administrative costs and expenses include trustee and record keeper providing services to the Plan, as well as other administrative services. Certain additional expenses are paid by the Bank.

Risks and Uncertainties

The Plan invests in various securities, including common stock, registered investment companies, and common and collective trusts. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is quite possible that changes in the value of investment securities will occur in the near term. Such changes could materially affect the amounts reported in the financial statements.

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Notes to Financial Statements

December 31, 2013 and 2012

 

 

NOTE 3 INVESTMENTS AND FAIR VALUE

The Plan’s fair value hierarchy for those assets that are measured at fair value on a recurring basis as of December 31, 2013 and 2012 are summarized as follows:

 

     2013         
     Fair Value Measurements         
     Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
     Significant
Other
Observable
Inputs
(Level 2)
     Significant
Unobservable
Inputs
(Level 3)
     Total  
           
           
           
           
           
           

ASSETS

           

Investments

           

Registered investment companies

           

Equity funds

   $ 253,363,770       $ —         $ —         $ 253,363,770   

Balanced funds

     61,657,248         —           —           61,657,248   

Bond funds

     67,925,150         —           —           67,925,150   
  

 

 

    

 

 

    

 

 

    

 

 

 
     382,946,168         —           —           382,946,168   

Money market funds

     114,519,621         2,875,746         —           117,395,367   

Common and collective trusts

           

Equity collective trusts (a)

     —           467,298,866         —           467,298,866   

Balanced collective trusts (b)

     —           108,429,901         —           108,429,901   

Bond collective trusts (a)

     —           5,176,344         —           5,176,344   
  

 

 

    

 

 

    

 

 

    

 

 

 
     —           580,905,111         —           580,905,111   

Common stock

           

Bank of Montreal

     68,002,999         —           —           68,002,999   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total investments

   $ 565,468,788       $ 583,780,857       $ —         $ 1,149,249,645   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Notes to Financial Statements

December 31, 2013 and 2012

 

 

NOTE 3 INVESTMENTS AND FAIR VALUE (continued)

 

 

     2012         
     Fair Value Measurements         
     Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
     Significant
Other
Observable
Inputs
(Level 2)
     Significant
Unobservable
Inputs
(Level 3)
     Total  
           
           
           
           
           
           

ASSETS

           

Investments

           

Registered investment companies

           

Equity funds

   $ 198,573,781       $ —         $ —         $ 198,573,781   

Balanced funds

     11,973,460         —           —           11,973,460   

Bond funds

     110,974,004         —           —           110,974,004   
  

 

 

    

 

 

    

 

 

    

 

 

 
     321,521,245         —           —           321,521,245   

Money market funds

     132,408,368         2,056,723         —           134,465,091   

Common and collective trusts

           

Equity collective trusts (a)

     —           332,914,652         —           332,914,652   

Balanced collective trusts (b)

     —           80,095,744         —           80,095,744   

Bond collective trusts (a)

     —           3,405,768         —           3,405,768   
  

 

 

    

 

 

    

 

 

    

 

 

 
     —           416,416,164         —           416,416,164   

Common stock

           

Bank of Montreal

     58,888,213         —           —           58,888,213   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total investments

   $ 512,817,826       $ 418,472,887       $ —         $ 931,290,713   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(a) These funds offer a range of risk/return characteristics and performance goals are to consistently outperform benchmarks, other funds, or certain indexes. Redemptions occur at net asset value by contract. There are currently no redemption restrictions on these funds. The fair value of these funds has been estimated using the net asset value per share and are classified in Level 2 of the fair value hierarchy.
(b) This category includes investments in highly diversified target date funds designed to remain appropriate for investors in terms of risk throughout a variety of life circumstances. These common and collective trust funds share the common goal of first growing and then later preserving principal and contain a mix of equity, bond and money market funds. There are currently no redemption restrictions on these investments. The fair values of the investments in this category have been estimated using the net asset value per share.

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Notes to Financial Statements

December 31, 2013 and 2012

 

 

NOTE 3 INVESTMENTS AND FAIR VALUE (continued)

 

The fair values of individual investments that represented 5% or more of the Plan’s net assets available for Plan benefits as of December 31, 2013 and 2012 are as follows:

 

     2013      2012  
     Number
of Shares
or Units
     Fair
Value
     Number
of Shares
or Units
     Fair
Value
 
           
           

DFA U.S. Small Cap Portfolio

     3,348,210       $ 103,794,510         3,063,297       $ 69,444,948   

PIMCO Total Return Fund, Institutional Class

     6,354,083         67,925,150         7,191,147         80,828,496   

T. Rowe Price Emerging Markets Equity Fund

     2,515,566         73,957,641         2,518,037         78,462,048   

Virtus Money Market Fund

     114,519,621         114,519,621         132,408,368         132,408,368   

EB DL Non-SL Stock Index Fund of The Bank of New York Mellon

     814,660         151,388,261         774,014         108,659,149   

Waddell & Reed Core Equity CIT

     16,905,752         241,752,251         17,438,421         184,672,884   

Bank of Montreal common stock

     1,020,147         68,002,999         960,656         58,888,213   

Net appreciation of Plan assets by type of investment during the years ended December 31, 2013 and 2012 are as follows:

 

     2013      2012  

Investments at fair value

     

Registered investment companies

   $ 35,176,228       $ 57,196,313   

Common and collective trusts

     127,528,300         31,250,648   

Common stock—Bank of Montreal

     5,476,049         6,209,327   
  

 

 

    

 

 

 
   $ 168,180,577       $ 94,656,288   
  

 

 

    

 

 

 

The Plan’s investments in Level 2 assets consist of common and collective trusts which invest in equities and a money market fund that calculate NAV per unit. The fair value of these accounts has been estimated using the NAV per unit. Investments in common and collective trusts are marked to market and priced daily. The money market fund calculates its NAV using the amortized cost method. These accounts may be redeemed at any time without any restrictions. There are no unfunded commitments to acquire additional units of any of these accounts as of December 31, 2013.

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Notes to Financial Statements

December 31, 2013 and 2012

 

 

NOTE 4 PLAN TERMINATION

Although it has not expressed any such intent, the Bank has the right under the Plan to discontinue its contributions at any time and to terminate the Plan at any time. Upon termination, the trustee is required to distribute each participant’s share in accordance with the Plan’s provisions.

 

NOTE 5 INCOME TAX STATUS

On March 9, 2012, the IRS issued a favorable determination letter with respect to the qualified status of the Plan. The favorable determination letter indicates that the terms of the Plan conform to the requirements of Sections 401(a) and 401(k) of the IRC and, therefore, the related trust is exempt from taxation. The Bank, therefore, also has a basis for deducting contributions to the Plan. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualified status. The Plan administrator believes the Plan is operated in compliance with the applicable requirements of the IRC and therefore believes the Plan is qualified and the related trust is tax exempt.

U.S. GAAP requires the Plan’s management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more-likely-than-not, based on the technical merits, to be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2013, there are no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is also subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan administrator believes the Plan is no longer subject to income tax examinations for years prior to 2010.

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

Notes to Financial Statements

December 31, 2013 and 2012

 

 

NOTE 6 RELATED PARTIES

Mellon acts as the sole trustee over the Plan’s assets. Additionally, BMO Global Asset Management acts as one of the Plan’s investment managers. All investment and trustee activities are monitored by the Benefits Administration and Investment Committees of the Bank.

In connection with a review of Plan investment options, it was identified that Plan investments in certain mutual funds advised by Virtus Investment Advisers (the “Virtus Funds”) may have resulted in an indirect benefit to BMO Financial Corp., the 100 percent owner of BMO Harris Bank N.A., sponsor of the Plan. The indirect benefit occurred by reason of BMO Financial Corp.’s indirect ownership of a 23 percent interest in Virtus Investment Advisers. Based on BMO Financial Corp.’s percentage ownership interest in Virtus Investment Advisers, the value of the benefit to BMO Financial Corp. attributable to Plan investments in the Virtus Funds from January 1, 2009 through July 24, 2012 (the “Correction Period”) totaled $618,098.

As of October 12, 2012, the Bank had made restorative payments for the Plan’s benefit of $618,098 (representing its “profits” during the Correction Period) plus “lost earnings” of $36,534, calculated using DOL’s Voluntary Fiduciary Correction Program Online Calculator. The restorative payments were paid into an account within the Plan’s trust. The Bank filed the Form 5330 in connection with the prohibited transaction on February 25, 2013.

 

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SUPPLEMENTARY INFORMATION

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

(Federal Employer Identification No.: 36-2085229; Plan Number: 001

Schedule G, Part III—Schedule of Nonexempt Transactions

Year Ended December 31, 2013

 

 

Identity of

Party Involved

 

Relationship to

Plan, Employer, or

Party-in-Interest

 

Description of

Transactions

(Including Maturity

Date, Rate of Interest,

Collateral, and Par

or Maturity Value)

  Purchase
Price
  Selling
Price
    Lease
Rental
    Expense
Incurred
with
Transaction
    Cost of
Asset
    Current
Value of
Asset on
Transaction
Date
    Net Gain
(Loss)
 

One employee

  Participant in the Plan   After BMO’s merger with another bank, some employees participating in both 401(K) plans that are administered by different record keepers obtained multiple loans in excess of $50,000.   $9,876   $ -0-      $ -0-      $ -0-      $ 9,876      $ 9,876      $ -0-   
    (see attachment to Form 5500 for more details)              

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

(Federal Employer Identification No.: 36-2085229; Plan Number: 001)

Schedule H, Line 4i—Schedule of Assets (Held at End of Year)

December 31, 2013

 

 

Party-in-
Interest

  

Identity of Issue,

Borrower, Lessor,

or Similar Party

   Description of Investment
(Including Maturity Date,
Rate of Interest, Collateral,
and Par or Maturity  Value)
   Cost   Current
Value
 
   Common and collective trusts        
  

BlackRock LifePath Index Retirement Non-Lendable Fund F

   919,742 units    (a)   $ 14,739,418   
  

BlackRock LifePath Index 2055 Non-Lendable Fund F

   87,229 units    (a)     1,436,905   
  

BlackRock LifePath Index 2050 Non-Lendable Fund F

   149,767 units    (a)     3,414,402   
  

BlackRock LifePath Index 2045 Non-Lendable Fund F

   249,368 units    (a)     5,511,602   
  

BkacjRock LifePath Index 2040 Non-Lendable Fund F

   284,204 units    (a)     6,069,599   
  

BlackRock LifePath Index 2035 Non-Lendable Fund F

   414,572 units    (a)     8,550,048   
  

BlackRock LifePath Index 2030 Non-Lendable Fund F

   700,551 units    (a)     13,894,090   
  

BlackRock LifePath Index 2025 Non-Lendable Fund F

   1,224,596 units    (a)     23,290,228   
  

BlackRock LifePath Index 2020 Non-Lendable Fund F

   1,211,690 units    (a)     21,867,243   
  

BlackRock LifePath Index 2015 Non-Lendable Fund F

   567,644 shares    (a)     9,656,366   
  

Waddell & Reed Core Equity CIT

   16,905,752 shares    (a)     241,752,251   

*

  

EB DL Non-SL Aggregate Bond Index Fund of The Bank of New York Mellon

   27,533 shares    (a)     3,401,831   

*

  

EB DL Non-SL TIPS Index Fund of The Bank of New York Mellon

   15,490 shares    (a)     1,774,513   

*

  

EB DL Non-SL ACWI ex-U.S. Fund of The Bank of New York Mellon

   45,079 shares    (a)     5,881,708   

*

  

EB DL Non-SL Small Cap Index Fund of The Bank of New York Mellon

   279,661 shares    (a)     55,847,485   

*

  

EB DL Non-SL Mid Cap Stock Fund of The Bank of New York Mellon

   69,382 shares    (a)     12,429,161   

*

  

EB DL Non-SL Stock Index Fund of The Bank of New York Mellon

   814,660 shares    (a)     151,388,261   
          

 

 

 
           $ 580,905,111   
          

 

 

 

 

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EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

(Federal Employer Identification No.: 36-2085229; Plan Number: 001)

Schedule H, Line 4i—Schedule of Assets (Held at End of Year)

December 31, 2013

 

 

Party-in-
Interest

  

Identity of Issue,

Borrower, Lessor,

or Similar Party

   Description of Investment
(Including Maturity Date,
Rate of Interest, Collateral,
and Par or Maturity  Value)
   Cost   Current
Value
 
   Registered Investment Companies:        
  

DFA U.S. Small Cap Portfolio

   3,348,210 shares    (a)   $ 103,794,510   
  

PIMCO Total Return Fund, Institutional Class

   6,354,083 shares    (a)     67,925,150   
  

PIMCO All Asset Fund, Institutional Class

   593,555 shares    (a)     7,170,144   
*   

BMO Diversified Income Fund

   72,622 units    (a)     2,321,848   
*   

BMO Moderate Balanced Fund

   160,258 units    (a)     6,001,112   
*   

BMO Growth Balanced Fund

   166,734 units    (a)     6,954,041   
*   

BMO Aggressive Balanced Fund

   173,420 units    (a)     7,921,771   
*   

BMO Diversified Stock Fund

   91,160 units    (a)     4,514,677   
*   

BMO Aggressive Stock Fund

   104,150 units    (a)     5,526,647   
*   

Virtus High Yield Income Fund, Class I

   2,244,499 shares    (a)     31,288,332   
  

MFS Institutional International Equity Fund

   2,560,020 shares    (a)     57,421,257   
  

T. Rowe Price Emerging Markets Equity Fund

   2,515,566 shares    (a)     73,957,641   
  

Hartford Mid Cap Stock Fund

   286,635 shares    (a)     8,149,038   
          

 

 

 
             382,946,168   
          

 

 

 
   Money Market Funds        

*

  

Virtus Money Market Fund

   114,519,621 shares    (a)     114,519,621   
*   

EB Temporary Investment Fund of The Bank of New York
Mellon

   2,875,746 units    (a)     2,875,746   
          

 

 

 
             117,395,367   
          

 

 

 
   Common Stock        
*   

Bank of Montreal

   1,020,147 shares    (a)     68,002,999   
          

 

 

 
   Notes Receivable from participants        
*   

Participant loans

   Notes receivable; interest rates     
      ranging from 3.25 percent to     
      9.50 percent for 2013    $-0-     18,787,680   
          

 

 

 
           $ 1,168,037,325   
          

 

 

 
(a) — These are participant-directed investments; therefore, the cost is not required to be reported.

There were no investment assets reportable as acquired and disposed of during the year ended December 31, 2013.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 

EMPLOYEES’ 401(k) SAVINGS PLAN OF BANK OF MONTREAL/HARRIS

/s/ Mary P. Wessel

Mary P. Wessel
Vice President Benefits

BMO Harris Bank N.A.,

its administrator

Date: June 23, 2014

 

-19-