Nova 401(k) Associates
Compensation Strategies Group, Ltd.
Nicholas Pension Consultants
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|A 403(b) Collective Trust? A Note of Caution|
Business of Benefits
Sept. 15, 2015
"Two issues need to be addressed with a 403(b) plan's purchase of the collective trust interests of the sort that are typically sold to 401(k) plans.  Code Section 403(b) only permits investments in mutual funds and annuity contracts. The CIT interests purchased by 401(a) plans, however, are 'unitized.' ...  But even if you could do share accounting and overcome the legal and logistical challenges to making this work for the Tax Code's 403(b) rules, there is a serious securities law problem."
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