Collective Investment Trusts (CITs)
Looking to see if a collective trust is the right choice for your qualified retirement plan? Learn about CITs and our resources.
CITs are tax-exempt, pooled investment vehicles available to certain qualified defined benefit and defined contribution retirement plans. They combine assets from eligible tax-qualified retirement plans into a single portfolio with a specific investment strategy.
Once primarily limited to the largest qualified retirement plans, advancements in the CIT market have made them appealing to small and mid-sized plans, too.
Lower cost structure and flexible pricing are just part of the story. CITs now offer a wide range of investment strategies and more readily available data for sponsors and participants.
Discover CIT Strategies Available for Your Plan
We manage several CIT strategies to offer flexibility to plan sponsors.
Advantages of CITs
Investment Strategy Choices
CITs can offer a wide range of investment options, including guaranteed retirement income and private investments.
Lower Cost Structure
CITs' overall operating expenses are generally lower than mutual funds because of the reduced filing, regulatory, marketing, distribution and administrative requirements.
Pricing Flexibility
Operational efficiency also allows CITs to offer pricing based on a wider range of eligibility factors, including investment size, overall relationship size and asset aggregation across plans.
While today CITs have gained more visibility and have more evaluation tools for investors (databases, CUSIPs, daily values, fact sheets), they still have some disadvantages compared to mutual funds. Use our in-depth guide to CITs to help inform your decision about whether they are right for your plan.
Compare CITs vs. Mutual Funds
Collective Investment Trusts | Mutual Funds | |
|---|---|---|
Vehicle Type | Pooled | Pooled |
Valuation | Daily | Daily |
Trade Settlement | National Securities Clearing Corp. (NSCC) | National Securities Clearing Corp. (NSCC) |
Audit | Annual | Annual |
Participant Performance | Fact Sheets | Fact Sheets |
Revenue Sharing | Optional | Optional |
Availability | Only to eligible retirement plans* | Retirement and other institutional plans and the general public |
Fees | Tend to be lower than mutual funds of a similar strategy due to a lower cost structure. Fee reductions may be available to larger accounts. | Tend to be higher than the CIT of a similar strategy due to a higher cost structure. |
Investment Objective | Set by the investment strategy, the same for all investors | Set by the investment strategy, the same for all investors |
Oversight and Regulation | Office of the Comptroller of the Currency (OCC) or a similar state banking regulator | Securities and Exchange Commission (SEC) |
Registration Expenses | None | Required |
Governing Documents | Fund Description | Prospectus |
Time to Market | 30-60 days, possibly less | Up to 90 days |
* Eligible retirement plans include certain qualified ERISA DC plans, including 401(k) plans and 401(a) plans, Taft-Hartley plans, certain qualified ERISA DB plans, and some non-ERISA government plans, including 457(b) plans.
Let Us Be Your CIT Resource
Our representatives are available to discuss CIT requirements, documents and help you determine whether they are right for your plan. You can also learn more about CITs in our detailed guide.
This information is for educational purposes only and is not intended as a personalized recommendation or fiduciary advice. There are different options available for your retirement plan investments. You should consider all options before making a decision. Our representatives can help you evaluate all of your distribution options.