What is a common collective trust?

A Common Collective Trust (CCT) is a vehicle usually operated by a bank or trust company. It is a product sold primarily to employee benefit plans such as 401(k) plans. The CCT holds a variety of individual investments within the trust that can include: Mutual funds. Bond or money market investments and other types.

Are all common collective trust fully benefit responsive?

The ASU also clarifies that indirect investments in fully benefit-responsive investment contracts (e.g. stable value common or collective trusts) should not be reflected as fully benefit-responsive investment contracts and therefore those indirect investments should be reported at fair value.

Are CITs regulated?

While they’re only available to those with qualified employer-sponsored retirement plans, CITs offer similar benefits to those of a mutual fund. Since CITs aren’t regulated by the SEC, they may not be the right fit for everyone.

When can you use Nav as a practical expedient?

However, if NAV is communicated to the investor but is not publicly available, NAV may be used as a practical expedient for fair value. This is common for alternative investments such as limited partnerships or venture capital funds.

What are the types of collective investment trusts?

Collective trusts generally fall into two types: A1 funds (also referred to as common trust funds); and A2 funds (also referred to as collective investment funds or collective investment trusts).

How is a Collective Investment Trust ( CIT ) regulated?

Most collective trusts are primarily regulated by the OCC where collective investment funds are described in Title 12, and further segregated as A1 funds or A2 funds. CITs are subject to compliance with Department of Labor (DOL) disclosure requirements under (ERISA) the Employee Retirement Income Security Act.

What is the IRS rule for collective trust funds?

IRS Revenue Ruling 81-100 tax-exempt group trust limited to eligible employee benefit plans adoption requirement IRS Determination Letter 8 15 Regulation: Federal Securities Laws Investment Company Act of 1940

Who are the participants in a collective investment fund?

Collective Investment Fund generic term Collective Trust Fund Participants are limited to employee benefit trusts Bank may act in any capacity for participating trusts Common Trust Fund Participants typically but not always are personal or other non-employee benefit trusts Bank must be trustee of each participating trust 3 5 Trends