Master Trust Investment Accounts

[Guest CSTS]

Does anyone have experience with filing the 5500 for a Master Trust? We are considering an arrangement for multiple employers to invest in one and are not familiar with the level of reporting on the separate Form 5500 required. I'm just looking for feedback on a personal experience more than anything.

Thanks in advance.

[Kirk Maldonado]

CSTS:

Will the employers be related or could they be unrelated?

[jquazza]

Kirk,

I think the issue is not whether you have one or multiple employer, the issue with MTIA is whether you have more than one plan assets in one account (could be for one employer only.)

Anyway, filing for a MTIA is not much more complicated than filing one for a regular plan. Just file one 5500 for the MTIA and one for each Participating plans, then add all the participating plans on the schedule D for the MTIA 5500 and a schedule D for each plan 5500 showing assets held in a MTIA.

If you're doing a schedule H, the underlying assets are reflected on the schedule H for the MTIA, for all the other plans, the only asset should be the MTIA (maybe part. loans as well.)

[JanetM]

If any of these underlying plans are audited you have some additional work. There is requriement for MT footnote disclosure for assets and income. There is additonal work on part of individual plan to ensure that trustee/custodian didn't make or error (or that plan sponsor didn't give bad directions that trustee followed) posting contributions, allocating expenses, making distribution and charging the right plan.

Just cause you might save a few bucks on asset management expenses might not cover the additonal work and issues that you will find.

As jquzza stated, it acutally makes filing 5500s easier for me. There are couple of quirks. On MT filing you show all assets and income detail, but contributions and distributions are deemed transfers to and from. At plan level, the assets and income are one line and the contributions, distributions are listed. Some other differnences, but it does really reduce the work.

[Kirk Maldonado]

jquazza:

Thanks for the clarification. Your post and Janet's post were very helpful.

[Guest CSTS]

Thanks for all the input, MTIA appear to be more work than they are worth. We're just trying to have all our facts straight before addressing the prospect.

[JanetM]

CSTS don't toss the idea just yet. I have 13 DB plans in MT with assets of about 400M. This allows me to file the 13 plans with only couple lines on the H filled in. All the detail is only done once at MT level. Believe me there is a lot of detail in this size operation.

Another advantage is scale. Pool the assets and cross that institutional line and you get lower fees .... and we are not talking chump change.