401(k) Plan Audit Question: RE: Investment Contract with Insurance Co. note to Financial Statements.

[Guest TGinthe'Ville]

Are there any auditors out there?

We are looking for some help for the following note disclosure and would very much appreciate your opinion(s).

The second paragraph of the AICPA’s sample note disclosure for Investment Contract with Insurance Company reads as follows:

There are no reserves against contract value for credit risk of the contract issuer or otherwise. The average yield and crediting interest rates were approximately 8 percent for 20X1 and 20X0. The crediting interest rate is based on a formula agreed upon with the issuer, but may not be less than 4 percent. Such interest rates are reviewed on a quarterly basis for resetting.

What source documents should we use to obtain these figures? We have inquired of our client’s third party administrator and they were not familiar with the terminology and consequently, did not know where to get the rates or the source of the formula.

Thank you for your help.

[BeckyMiller]

I do not know the answer to your question, sorry. But, if your firm is a member of the AICPA audit quality center for employee benefit plans, I suggest you post your question there. More auditors visit that page than this.

[wmyer]

That information would likely be in the prospectus.

[Guest snappy]

Or the insurance contract.