What is a Collective Trust Fund?

Collective Trust Funds have been growing in popularity. These funds are tax-exempt and administered by banks and trust companies, CTFs are available for both defined benefit and defined contribution plans and can only consist of assets that are exempt from federal income tax such as retirement, pension, profit sharing, stock bonus, or other trusts.

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The Appeal of Collective Trust Funds
Part of the current appeal of Collective Trust Funds is their low startup and operational costs and their utilization in target dated portfolios. These low costs, combined with the potential for significant returns have increased their popularity, along with improvements that have allowed some funds to be valued daily, a necessity for 401(k)s.

As is the case with other fiduciary assets, participating interests in a CTF are not FDIC-insured. In addition, participating interests in a CTF are not subject to potential claims by a bank’s creditors, and not overseen by the SEC regulations that mutual funds are held to. This lack of regulation, of course, has both positive and negative aspects, as far as investors are concerned.

“Provident Trust Group has grown to over 30,000 clients with over $3 billion in assets currently in custody. Both internationally and across the U.S., clients and their teams of financial advisors have placed their confidence in us.”

The Provident Advantage

Client Focused
Provident is owned and operated by a team of tax attorneys and highly qualified professionals who understand that personalized, timely service is what our clients our looking for in a fund administrator.

Full Compliance and Continuous Communication
At Provident, we make sure that every IRS and State recording and reporting requirement is met and that our clients fully understand what their options and limitations are in regard to establishing and participating in a Collective Trust Fund. Our clients can count on full reporting to both the government and to them, on a timely basis.

All it takes is a phone call, to begin your relationship with the professionals at Provident, though we’d be happy to meet you in person at our Las Vegas office as well.

Give us a call at (888) 855-9856. We’d be happy to answer your questions related to setting up and contributing to a Collective Trust Fund.