PLAN SPONSOR’S GUIDE TO RETIREMENT PLAN INVESTMENTS Glossary of Terms and Acronyms CCTs: Common/collective trusts resemble mutual funds but are not registered with the SEC and are typically issued by financial institutions. Current Value: (ERISA) section 3(26) defines the term current value as: “fair market value where available and otherwise the fair value as determined in good faith by a trustee or a named fiduciary pursuant to the terms of the plan and in accordance with regulations of the Secretary [of Labor], assuming an orderly liquidation at the time of such determination.” Generally current value and fair value under GAAP are the same. DOL: Department of Labor ERISA: Employee Retirement Income Security Act of 1974 includes rules and regulations for employee benefit plans. ETFs: Exchange-Traded Funds or exchange-traded equity securities. Fair Value: FASB ASC 820 defines fair value as: “the price that would be received to sell an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Form 5500: The DOL, the IRS, and the Pension Benefit Guaranty Corporation jointly developed the Form 5500 in order for employee benefit plans to satisfy annual reporting requirements under Title I and Title IV of ERISA and under the Internal Revenue Code, thus, the Form 5500 serves as both a regulatory form as well as a tax filing. GAAP: U.S. Generally Accepted Accounting Principles GIC: A Guaranteed Investment Contract consists of a contract with the issuer in which the plan holds an interest in the general assets of the issuer, however, the investment return of the contract may be indexed to a certain set of specific assets or a fixed rate of return. IDC: Interactive Data Corporation is a nationally recognized pricing service that can help plan custodians determine fair value for various securities. PSAs: Pooled Separate Accounts resemble mutual funds but are not registered with the SEC and are issued by insurance companies. NAV: Net Asset Value equals the total fair value of the pooled investment vehicle’s assets divided by the total number of units or interests outstanding for the fund. GAAP allows the NAV to be used as fair value for qualifying investments. Synthetic GIC: A synthetic Guaranteed Investment Contract in which the return is based on the return of a pool of assets that is owned by the plan. The contract also includes a thirdparty wrapper that guarantees the contract’s stated interest rate and principal. Wrapper: A derivative instrument designed to provide a guarantee of a contract’s stated interest rate and principal (i.e. if the underlying assets underperform, the counterparty to the wrapper will make the plan whole). www.mhmcpa.com © Copyright 2014.

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