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Collective Investment Trusts (CITs) have gained traction amongst plan sponsors over the past decade-plus as viable investment alternatives to their mutual fund counterparts. Although CITs may seem like a recent phenomenon, the Coalition of Collective Investment Trusts notes that the first CIT was created in 1927. So, while they have been in existence just about as long as the more commonly used mutual funds, it was not until the 1980's that CITs began to be utilized in defined contribution (DC) plans. Plan fiduciaries are then well-advised to examine in detail what collective funds are, how they may be constructed and regulated differently than mutual funds, and the advantages and disadvantages to utilizing CITs in retirement plan fund offerings.
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