Trust Accounting

Trust accounting is a key component of plan management and operation. The byproduct of the trust accounting function is the preparation of financial statements for the plan and trust. These include balance sheets, income statements and reconciliation of contributions, earnings, other income, expenses, assets and liabilities. In substance, the accounting function for a plan is similar to that required for a business, except that the accounting for assets can involve a wide variety of investment approaches and different kinds of investments.

Retirement plan accounting involves reconciliation of individual participants' plan accounts and sub-accounts with the total assets held in trust. The accounting effort is highly dependent on the number of individual accounts and sub accounts for each participant, as well as the total number of different investments. The complexity increases when individual participants are allowed to select investments from different investment organizations or through multiple investment service providers. The effort may also be increased when contribution and/or investment information is not provided to Spectrum on a timely basis or when information provided is incorrect.

Trust accounting also provides information that is required for governmental reporting and disclosure, as part of the annual Form 5500 filing process. It also furnishes information required for Independent Qualified Plan Audits, where required by law, in the case of plans with 100 or more participants.

Spectrum provides trust accounting services for all plans for which administration services are provided. Plan financial reports are provided on either a quarterly or annual basis, depending on the requirements of each plan, the types of investments made and the record keeping method selected.