A fiduciary fund is an account with funds from assets that the government holds as a trustee and that it cannot use to fund its own programs. Fiduciary funds include pension and employee benefit trust funds, agency funds, external investment trust funds and private-purpose trust funds.
Agency funds are funds that the government holds, as a custodian, on behalf of other agencies such as a temporary investment by individuals or other governments. Each government accountant must always report agency funds in the statement of changes in assets, but must never use them in the statement of changes in fiduciary net position. External investments trust funds are used by the government to report the external portion of a pool of investment funds as a fiduciary fund. This includes investment pools that collect funds from separate legal entities and invest such funds on behalf of the participants.
Pension and other employee benefits trust funds are used to report assets that the government holds in trust for beneficiaries of defined contribution plans and other employee benefit plans. Each individual pension plan must have its own separate trust fund. Private-purpose trust funds are used to hold funds that benefit individuals, other governments and private organizations.
Financial statements used to present fiduciary fund financial information include: statement of fiduciary net position, statement of changes in fiduciary net position, and statement of changes in assets and liabilities.