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A Superior Collective Investment Trust Onboarding Experience.
A Superior Collective Investment Trust Onboarding Experience.
Next week, the full House of Representatives will vote on the INVEST Act – legislation that consolidates more than 20 bills aimed at strengthening capital markets. Among its provisions is a measure with broad bipartisan support that has been years in the making: bringing Collective Investment Trusts (CITs) to 403(b) plans.
This legislation would align investment options available in 403(b) plans with those already available in 401(k), 457(b), and the Federal Thrift Savings Plan. This alignment is crucial for promoting investment parity for millions of teachers, nurses, and nonprofit workers who have been locked out of this lower-cost, and strictly regulated, investment vehicle.
The Case for CITs in 403(b) Plans
CITs are offered by banks and trust companies, overseen by federal or state banking regulators, subject to an overlapping body of additional laws, and can often be operated more efficiently and at a lower cost than comparable mutual funds. Their structure – designed exclusively for qualified retirement plans – allows for more cost-effective operation compared to mutual funds.
With millions of Americans who rely on 403(b)s to save for retirement currently unable to access CITs, the cost savings could amount to hundreds of millions of dollars annually going back to retirement savers.
The Journey Continues
As this important bill moves to a vote next week, continued engagement by all stakeholders – retirement plan fiduciaries, participants, and service providers – is critical to galvanize support for its passage.
Great Gray remains committed to supporting this effort, with the goal of creating a more open and equitable retirement savings ecosystem. We urge our allies in the retirement industry to join us in supporting this measure.
Great Gray Trust Company, LLC Collective Investment Funds (“Great Gray Funds”) are bank collective investment funds; they are not mutual funds. Great Gray Trust Company, LLC serves as the Trustee of the Great Gray Funds and maintains ultimate fiduciary authority over the management of, and investments made in, the Great Gray Funds. Great Gray Funds and their units are exempt from registration under the Investment Company Act of 1940 and the Securities Act of 1933, respectively.
Investments in the Great Gray Funds are not bank deposits or obligations of and are not insured or guaranteed by Great Gray Trust Company, LLC, any bank, the FDIC, the Federal Reserve, or any other governmental agency. The Great Gray Funds are commingled investment vehicles, and as such, the values of the underlying investments will rise and fall according to market activity; it is possible to lose money by investing in the Great Gray Funds.
Participation in Collective Investment Trust Funds is limited primarily to qualified retirement plans and certain state or local government plans and is not available to IRAs, health and welfare plans and, in certain cases, Keogh (H.R. 10) plans. Collective Investment Trust Funds may be suitable investments for plan fiduciaries seeking to construct a well-diversified retirement savings program. Investors should consider the investment objectives, risks, charges, and expenses of any pooled investment fund carefully before investing. The Additional Fund Information and Principal Risk Definitions (PRD) contains this and other information about a Collective Investment Trust Fund and is available at www.greatgray.com/cit-fund-info/principal-risk-definitions/ or ask for a free copy by contacting Great Gray Trust Company, LLC at (866) 427-6885.
Great Gray® and Great Gray Trust Company are service marks used in connection with various fiduciary and non-fiduciary services offered by Great Gray Trust Company, LLC.