The COVID-19 pandemic has taken a tremendous economic toll on businesses and individuals, forcing people to evaluate critical issues, including how well their retirement plan can weather this storm.  Though a busy and challenging time, this is an opportune moment for plan advisers to ensure that their plan sponsors and participants have access to low-cost, flexible investment vehicles.

  • Collective investment trusts (CITs) can help address industry-wide fee pressures.  Compared to mutual funds, CITS generally have lower administrative, marketing and distribution costs.
  • CITs can support an increased focus on fiduciary obligations.  The CIT trustee will always be an Employee Retirement Income Security Act (ERISA) Section 3(38) fiduciary, which may provide the plan sponsor with additional protection.
  • The CIT market is becoming even more transparent.  Because of the ongoing work of entities such as the Nasdaq Fund Network, there are now hundreds of searchable CIT tickers available to the general public.

Rob Barnett, head of retirement distribution, explains why CITs are an option deserving of a fresh look from advisers for use in defined contribution (DC) and defined benefit (DB) plans.

Please see important disclosures at the end of the article.

This article reprint was published in the June 25, 2020 edition of

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