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Home > Library > Stable Times > Volume 5, Issue 1  The quarterly publication of the Stable Value Investment Association First Quarter 2001 • Volume 5 Issue 1 Modified Reporting Requirements for Certain Master Trust Stable Value FundsBy Marla J. Kreindler, Katten Muchin Zavis If you are a fiduciary of a stable value fund established under a master trust and you are not familiar with the special reporting requirements that are applicable to a Master Trust Investment Account (or MTIA), read on. As you may know, the Form 5500 (Annual Return/Report of Employee Benefit Plan) has seen many changes over the past several years. As a part of these changes, plan sponsors are required to file a separate Form 5500 for each Master Trust Investment Account in which a plan participates. For this purpose, a master trust is a trust for which a regulated financial institution serves as trustee or custodian and that allows for commingled investments among two or more plans maintained by a single employer or group of employers under common control. According to the instructions for the 2000 Form 5500, an MTIA may consist of a pool of assets or a single asset. In the case of a defined contribution plan that provides for participant-directed investments in registered investment companies, insurance contracts, common/collective trusts or any other asset that has a current value that is readily determinable on an established market, all such assets may be treated as a single MTIA. (Note that the 1999 Form 5500 was interpreted by some to imply that separate MTIA reporting might be required for each separate investment by a master trust in a collective trust or a mutual fund, but the instructions for the 2000 Form 5500 have clarified this aspect of MTIA reporting requirements.) In the case of a stable value fund established under a master trust, a separate MTIA will therefore be created where the fund includes investments that are not exempt from separate MTIA reporting requirements. For example, it appears that a separate MTIA would be created if the stable value fund's fixed income portfolio includes direct investments in private placements, if the value of such assets is not readily determinable on an established market. Also, synthetic GICS that do not qualify as an insurance contract could also trigger a separate MTIA reporting requirement. On the other hand, a separate MTIA would not be created where a master trust's stable value fund is comprised only of investments in one or more stable value collective investment trusts, stable value mutual funds, traditional GICs or other assets the value of which is readily determinable on an established market. Since the Form 5500 reporting requirements for an MTIA are relatively simple, the key task is in determining whether the stable value fund will be considered to be a separate MTIA which requires a separate Form 5500 filing. In the event a master trust's stable value investment option is treated as a separate MTIA, the MTIA Form 5500 filing is required to be filed annually. The specific filing requirements are included in the instructions for the 2000 Form 5500.
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