From 2011 to 2018, total assets in CITs grew by approximately 64 percent. During which their share of 401(k) assets reached nearly 28 percent, or approximately $1.5 trillion.
The advantages of CITs are plentiful:
– Lower operational and marketing expenses
– A more controlled trading structure compared to mutual funds
– They’re exempt from registration with SEC, thereby avoiding costly registration fees
On the other hand, CITs are only available to qualified retirement plans and they may have higher minimum investment requirements. While CITs have traditionally only been available to large and mega-sized plans, continued fee litigation - as well as increased CIT transparency, reporting capabilities and enhanced awareness – has amplified the allure of CITs to plan sponsors across all plan sizes. However, CITs have not been widely available to all plans — until now. Through your advisor’s strategic partnership with RPAG, a national alliance of advisors with over 60,000 plans and $600 billion in retirement plan assets collectively⁴, they can provide their clients with exclusive access to actively managed, passively managed and target date CITs, featuring top-tier asset managers⁵ at a substantially reduced cost.
For more information on CITs, contact your financial professional.
²Collective Investment Trusts: An Important Piece in the retirement Planning Puzzle-Wilmington Trust-2020
³DST kasina with data from Department of Labor, Investment Company Institute.
⁴As of 1/1/2020.
⁵Top-tier asset managers include BlackRock, Franklin Templeton and Lord Abbett.
The target date is the approximate date when investors plan on withdrawing their money. Generally, the asset allocation of each fund will change on an annual basis with the asset allocation becoming more conservative as the fund nears target retirement date. The principal value of the funds is not guaranteed at any time including at and
after the target date.
Collective investment trusts available only to qualified plans and governmental 457(b) plans. They are not mutual funds and are not registered with the Securities and Exchange Commission.