Which statement about collective investment trusts is accurate with respect to ERISA?

Which statement about collective investment trusts is accurate with respect to ERISA?

• A. They are not subject to ERISA regulation
• B. They are not subject to ERISA disclosure requirements
• C. They are offered only to individuals outside plans
• D. They are pooled funds offered by a bank to benefit plans and are ERISA-subject but not subject to disclosure requirements

Answer: (D)

Collective investment trusts are pooled investment vehicles run by banks for employee benefit plans. They are ERISA-subject because they hold plan assets and are governed by fiduciary standards when managing those assets. However, they aren’t registered under the Investment Company Act of 1940, so they don’t have to meet the SEC disclosure requirements that apply to mutual funds and other registered funds. That combination—being a bank-operated pool for plans while skipping SEC-style disclosures—fits the statement that describes them as ERISA-subject but not subject to those disclosure requirements. They’re also designed for plans, not for individuals outside of plans.

Collective investment trusts are pooled investment vehicles run by banks for employee benefit plans. They are ERISA-subject because they hold plan assets and are governed by fiduciary standards when managing those assets. However, they aren’t registered under the Investment Company Act of 1940, so they don’t have to meet the SEC disclosure requirements that apply to mutual funds and other registered funds. That combination—being a bank-operated pool for plans while skipping SEC-style disclosures—fits the statement that describes them as ERISA-subject but not subject to those disclosure requirements. They’re also designed for plans, not for individuals outside of plans.