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The Forward-Thinking Approach to Retirement Planning

 

 

Collective Investment Trusts (CITs) are transparent, flexible,
+ innovative.

CITs are showing industry-shifting adoption rates. In 2023, 84% of plan sponsors* offered CITs as part of their fund options — and CIT asset growth has outpaced mutual funds since 2018**. In fact, CITs are now the most dominant target-date vehicle. And we don’t see that trend slowing down.

* Callan Institute’s 2023 Defined Contribution Trends Survey
** Cerulli US Monthly Trends Product Report

 

Understanding CITs

 

CITs Defined

CITs are tax-exempt, pooled investment vehicles sponsored and maintained by a trustee that is a bank or trust company. CITs combine assets from eligible investors into a single investment portfolio (or fund) to pursue a set of stated investment objectives and strategies.

 

Did You Know?

CITs have been around since the 1920s, but their popularity has surged in recent years as an investment vehicle option for retirement plans.

 

The Difference Between CITs vs. Mutual Funds

 

CITs share some similarities with mutual funds, but because CITs are tailored for the institutional retirement market, they can offer distinct advantages.

 

 

 

FLEXIBILITY

CITs typically have fewer regulatory constraints than mutual funds, which allows for more adaptability in terms of investment strategies, fee structures, and customization for specific retirement plans.

 

COST EFFICIENCY

CITs generally have lower operational and administrative costs as they are not subject to the same marketing, legal, and distribution fees that mutual funds often face, leading to lower expenses.

 

TAX ADVANTAGES

CITs are not subject to capital gains taxes at the trust level, unlike mutual funds, allowing trustees to make investment decisions without tax constraints, ensuring greater agility in portfolio management.

 

FIDUCIARY TRUSTEESHIP

Trustees are committed to optimizing and safeguarding the assets within the fund, all while upholding the highest ethical and professional standards.

 

CITs

Mutual Funds

Regulated 
by

CITs

OCC or state bank/trust regulator, DOL, IRS

Mutual Funds

SEC
Fees

CITs

Greater flexibility and generally lower fees relative to comparable funds

Mutual Funds

Reflected in share class expense ratios including operational costs that can be higher for SEC-registered funds
Offering Documents

CITs

Declaration of Trust and
Participation Agreement

Mutual Funds

Prospectus
Trustee or Board of Directors

CITs

Trustee: ERISA Fiduciary for Investment decisions

Mutual Funds

Board of Directors: Responsible for overseeing fund services in compliance with federal securities laws
Availability

CITs

Limited to tax-qualified corporate retirement plans and certain state and local government plans; they are not available to IRAs or individual investors

Mutual Funds

General public

Great Gray CITs are built on a foundation of trust alongside leading asset managers.

 

The combination of tax efficiency and fiduciary responsibility makes CITs a reliable, flexible option for retirement plans focused on long-term growth and security.

 

CIT Education

 

The Role of a Trustee in a Successful CIT Strategy 403(b) Senate Update CITs vs. Mutual Funds What is a CIT?