Fiduciary Oversight for CITs
Collective Investment Trust
Benefit Trust sponsors and serves as discretionary trustee of Collective Investment Trusts (CITs) which have been created under the Declaration of Trust. Benefit Trust employs third party managers for all the CITs. As a trust company, Benefit Trust serves as a provider of active fiduciary oversight and allocation, custody, portfolio accounting and transfer agent services for the CITs which are traded via the NSCC.
Collective Investment Trusts
- declaration of trust
- traded via nscc
- morningstar reporting requirements
- investment management agreement
- illiquid/alternative assets
- transfer agent services
- performance reporting
- regulatory & compliance
- accounting and daily valuations
Master Trust Sponsor & Fiduciary Activities
- Serve as Trustee of the trust and assume fiduciary responsibility for the collective trust/funds activities
- Maintain the declaration of trust in accordance with governing banking regulations
- Create share classes with shareholder servicing revenue where appropriate
- Prepare an investment policy statement for each new fund and provide amendments should an investment objective be changed or modified
- Provide the necessary type of investment authorization agreements (participation or joinder agreements)
- Generate fund fact sheets for each fund
- Enter into required agreements with recordkeepers to ensure a conduit exists for providing CIT information, reports, prospectuses, and notices to participating plan participants
- File required governmental plan reports for the trust
- Prepare and distribute annual audited financial statements for each fund
- Monitor and approve advisor activities and management fees on an ongoing basis
- Ensure that investments are in compliance with the fund’s investment policy statement
- Examine and approve contribution plans participating in the CITs prior to the initial admission into the trust funds
- Provide 408(b)(2) and 404(a)(5) disclosure materials for distribution to financial intermediaries and qualified retirement plan sponsors
- Accessible through Morningstar
- Maintain custody of trust assets and/or retirement accounts
- Settle underlying trades for the collective investment funds
- Calculate and provide periodic investment strategy performance for each fund
- Monitor and maintain the glide path methodology for the target date fund series
- Provide investment option advisors with daily cash and security position reports and/or provide on-line inquiry into the custody/valuation accounting system
- As transfer agent and fund manager, maintain the official books of record for the trust funds including a record of participating plans
- Reconcile cash and underlying position holdings daily
- Determine the NAV of each fund daily
- Communicate trust fund unit activity and daily NAVs to the NSCC and other interested parties
- Provide investment vehicle performance reporting and compare to the appropriate benchmark for each fund
- Calculate, accrue, and remit shareholder servicing revenue to the recordkeepers or trading platforms for trust fund share and asset classes that have a shareholder servicing revenue feature
The funds created under the Declaration of Trust and regulated by the Office of the Comptroller of the Currency (OCC) were established to provide a vehicle for the efficient collective investment of assets of ERISA plans.
Benefit Trust, serving as Trustee of the CITs, is a bank as defined in §2(5) of the Investment Company Act of 1940, as amended (“Investment Company Act”), and is a fiduciary, within the meaning of §3(21) of ERISA, and is an investment manager, as defined in §3(38) of ERISA, with respect to each participating plan that is subject to Part 4 of Title I of ERISA.
The Investors Master Trust for Employee Benefit Trusts is exempt from taxation under Code §501(a) and qualifies as a group trust under Revenue ruling 81-100.
Investment advisors appointed by Benefit Trust shall be qualified to serve as an investment manager under §3(38) of ERISA, as a “qualified professional asset manager” as described in Prohibited Transaction Class Exemption 84-14 issued by the United States Department of Labor.
Each advisor acknowledges in writing that it is a fiduciary with respect to the plan assets invested in the CITs by the participating accounts within the meaning of §3(21) of ERISA.