Collective Investment Trusts (CITs) offer competitive and flexible investment vehicles for qualified retirement plans
Basics
- CITs are pooled investment vehicles offered by a bank or trust company and available to qualified employee pension plans, including 401(k) plans, and certain governmental plans such as 457(b) plans
- GTC, as a third-party trustee, provides a full range of fiduciary trust and administrative services in support of CITs including hiring investment managers as sub-advisors to the funds and hiring and managing all external service providers including custodians, record keepers, and auditors
Benefits
- Offer cost effective alternative for servicing multiple qualified ERISA clients within a single product
- Pricing flexibility allows investor specific fee schedules
- Ability to maintain multiple share classes per strategy
- Operationally similar to mutual funds
- Daily valuations and liquidity
- NSCC trading
- Seamless integration with record keepers and platforms
- Strong product awareness with plan sponsors and investment consultants
- Fewer compliance and regulatory requirements relative to mutual funds
Opportunity
- CITs provide another source of distribution to meet the needs of investors and provide managers an efficient and cost effective solution to win additional mandates
- Funds can be offered as stand-alone investments or as part of multi-asset, target date funds
- Plan sponsors may be able to reduce their fiduciary risk by including CITs as plan investment options given potential for lower costs and added fiduciary oversight
- Provide ability to offer the same valuable investment options (e.g., alternative assets – real estate, private equity, commodities, bank loans, etc.) within DC plans which have been historically limited to traditional pension plans and institutional investors