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CITs: What you need to know and why

CITs are arguably changing the retirement investment landscape because of an insistence on behalf of plans sponsors of all sizes, but particularly the largest, to keep their exposure to management fees in control.

By Nick Thornton | Updated on March 31, 2014

When mutual fund company American Century recently announced the rollout of a new line of target-dated Collective Investment Trusts (CITs), it was the latest evidence that plan sponsors are demanding alternative structures to the defined benefit and defined contribution plans they offer their employees.

“We initially offered CITs in the early 2000s but there wasn’t enough traction to keep the funds going,” explains Drew Billingsley, vice president of Institutional Product Strategy at the Kansas City-based investment company. “In 2009 we launched a new line-up of CITs. At that point we were trying to get out ahead of what we saw was an emerging trend. With this latest rollout of target-date funds, we were responding to direct demand, specifically from Lockton, who in this case is the sponsor, as we manage money for Lockton plans.”

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Nick Thornton

Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.

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