As part of its Best Practices publications, the Defined Contribution Real Estate Council (DCREC) has released a new white paper that discusses recordkeeping for private real estate funds in defined contribution plans.
The purpose of the paper, Generally Accepted Practices for Recordkeeping Private Real Estate Funds in Defined Contribution Plans, is to, “address perceived operational complexities and provide confidence to fiduciaries, record keepers, custodians and other administrative service providers in accessing and administering less liquid options in a daily valued environment.” The paper also covers a range of issues on cash flow, on boarding, and managing agreements with custodians and other third parties.
The DCREC seeks to provide operational guidance to fiduciaries, record keepers, custodians and other administrative service providers tasked with accessing and administering less liquid options in a daily valued environment with the paper. It includes a discussion of the generally accepted practices for the management of cash flows, and potential liquidity restrictions that may occur when using less liquid asset classes within a multi-asset investment offering.
The recordkeeping white paper is the third in a series of “best practices” white papers published by DCREC. It follows the release of papers on product structure, principles of daily valuation, and a RFP checklist for plan sponsors and consultants considering the addition of private real estate as an investment option in defined contribution (DC) plans.
“As the use of direct real estate in DC plans continues to increase, establishing best practices is vital, and one of the core missions of the DCREC,” said Lennine Occhino and Laurie Tillinghast, co-chairs of DCREC’s Best Practices Committee in an interview about the newly published piece. “The recordkeeping white paper is designed as an initial roadmap for plan sponsors and other institutions who want to know how the industry is addressing issues of liquidity, trading, and custody. It’s one more piece that should make it easier to include direct real estate in DC plans.”
The Defined Contribution Real Estate Council was formed in 2012 to promote the inclusion of investments in direct commercial real estate and real estate securities, including REITs, within defined contribution plans.
