Part 3 of 4: Plan Sponsor’s Guide to Retirement Plan Investments
A fundamental responsibility of a plan sponsor is to prove the values of the investments in the retirement plan.
If your plan is invested solely in assets with readily determinable fair values, such as mutual funds or marketable securities, you’ll typically obtain fair values from nationally recognized pricing services such as Interactive Data Corporation (IDC) or Bloomberg. However, if your plan invests in assets without readily determinable fair values, the reported values may be based on the best information available, which may or may not be fair value.
To obtain the fair value for alternative investments, a process should be developed to determine the reliability of the evidence obtained and when the use of specialists is needed.
There are three acceptable techniques that can be used to determine the fair value of an investment: