Employee benefit plan investments often consist of marketable securities, such as common or preferred stocks, bonds, notes, or shares of registered investment companies, or various types of alternative investments such as common/collective trusts, pooled separate accounts, stable value funds, private equity funds, hedge funds, real estate investment trust, securities lending, forward contracts, futures, credit default swaps, and offshore funds.
Resources
The Center and the AICPA have taken a number of steps to compile and develop tools and resources to assist auditors in understanding various types of plan investments and in implementing the various accounting and auditing standards that relate to plan investments. Those resources can be accessed through the following links:
Plan Investments in Bank Collective Investment Funds
Bank collective investment funds are specifically designed under banking and tax laws for qualified tax-exempt retirement plans and certain trusts.
Insurance Company Products Offered to Employee Benefit Plans
This primer provides an overview of various types of products offered by insurance companies and discusses trusteeship and custodianship; identifying the various products; allocated vs. unallocated contracts; reporting; and references to the relevant accounting and auditing professional literature.
AICPA Audit Guide, Special Considerations in Auditing Financial Instruments
This guide provides auditors with background information on and a discussion of audit considerations relating to financial instruments.
Investments in Limited Partnerships and Reporting Such Investments on Form 5500 and 103–12 Entities
Pension funds are frequently investing in limited partnership private equity funds that may include hedge funds. These pooled investment funds are lightly regulated and not readily marketable, unlike registered investment funds, commonly known as mutual funds.