Should the plan be accounted for as a fiduciary fund

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Problem 1: The City of Acton maintains a defined contribution pension plan for its employees. Employees contribute 6 percent of their salaries; the city contributes 8 percent. The city has a fiduciary duty for the plan, but certain management functions to a well-known private annuity company. The city makes all key investment decisions. The city deducts the employee contributions from paychecks and each month sends the annuity company a check representing the amounts deducted plus the city's match. The annuity company handles all correspondence with both employees and retirees and makes the benefit payments to the retirees. Each month it sends the city a report of transactions and balances. Should the plan be accounted for as a fiduciary fund, just as if the city managed the fund itself?

Reference no: EM132724534

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