How many of you in your work retirement plans have Collective Investment Trusts (CIT) vs. Mutual Funds and Exchange Traded Funds?
I work for a large Dow Jones 30 company. My understanding is that CITs are not regulated by SEC but are overseen by bank regulators (e.g. OCC, DOL etc.) and are subject to ERISA laws. Like many of you, a significant portion (about 45%) of our retirement assets is in my company 401k plan. The individual CITs in my company’s plan are managed by:
-AllianceBernstein,
-JP Morgan Asset Management and
-State Street Global Advisors.
They have low costs (an aggregate ER of 0.032% which is good) but have limited transparency/reporting (part of the reason for the low ER but bad from a transparency perspective) vs. mutual funds and ETFs and cannot be rolled over in-kind but as cash into IRAs.
I am going to be 64 in May, and I am about 2-years from a planned retirement and have a conservative growth allocation. The CITs have low expense ratios:
Collective Investment Trust---------------Reference Index--------2024 Return------Expense Ratio-----Manager
US Large Cap Equity Index--------------------S&P 500---------------+ 25.01%-------------0.0131%-----------SSgA
US Small/Mid Cap Equity Index-RS Small Cap Completeness-----+ 17.11%----------- 0.0322%------------SSgA
International Equity Index-----------------MCSI ACWI--------------- + 5.11%-------------0.0763%------------SSgA
Fixed Income Index----------------Bloomberg Agg Bond Index----- + 1.36%--------------0.0262%------------SSgA
Capital Preservation------------------------FTSE 3m T-Bill----------- + 5.46%------=------ 0.0660%--------JP Morgan
I also have smaller amounts after tax dollars when I exceed the yearly 401k maximum and for simplicity, I have invested 50%/50% in two of the available Target Date CITs managed by Alliance Bernstein.
Collective Investment Trust----------Asset Allocation--------2024 Return------Expense Ratio-----Manager
2020 Retirement Portfolio-----------51%/38%/11%-----------+17.43%-------------0.18%------AllianceBernstein
2015 Retirement Portfolio-----------44%/37%/19%-----------+18.01%-------------0.18%------AllianceBernstein
Each CIT does not have prospectus just a very brief objective statement, paragraph strategy summary, paragraph risk summary and additional disclosures (e.g., stating it is a CIT, the index it follows, who manages it and that it is not a mutual fund). Asset allocation information is available on the custodian website (Fidelity NetBenefits).
How common are the use of CITs in company plans and is the level of disclosure that I describe typical?
I work for a large Dow Jones 30 company. My understanding is that CITs are not regulated by SEC but are overseen by bank regulators (e.g. OCC, DOL etc.) and are subject to ERISA laws. Like many of you, a significant portion (about 45%) of our retirement assets is in my company 401k plan. The individual CITs in my company’s plan are managed by:
-AllianceBernstein,
-JP Morgan Asset Management and
-State Street Global Advisors.
They have low costs (an aggregate ER of 0.032% which is good) but have limited transparency/reporting (part of the reason for the low ER but bad from a transparency perspective) vs. mutual funds and ETFs and cannot be rolled over in-kind but as cash into IRAs.
I am going to be 64 in May, and I am about 2-years from a planned retirement and have a conservative growth allocation. The CITs have low expense ratios:
Collective Investment Trust---------------Reference Index--------2024 Return------Expense Ratio-----Manager
US Large Cap Equity Index--------------------S&P 500---------------+ 25.01%-------------0.0131%-----------SSgA
US Small/Mid Cap Equity Index-RS Small Cap Completeness-----+ 17.11%----------- 0.0322%------------SSgA
International Equity Index-----------------MCSI ACWI--------------- + 5.11%-------------0.0763%------------SSgA
Fixed Income Index----------------Bloomberg Agg Bond Index----- + 1.36%--------------0.0262%------------SSgA
Capital Preservation------------------------FTSE 3m T-Bill----------- + 5.46%------=------ 0.0660%--------JP Morgan
I also have smaller amounts after tax dollars when I exceed the yearly 401k maximum and for simplicity, I have invested 50%/50% in two of the available Target Date CITs managed by Alliance Bernstein.
Collective Investment Trust----------Asset Allocation--------2024 Return------Expense Ratio-----Manager
2020 Retirement Portfolio-----------51%/38%/11%-----------+17.43%-------------0.18%------AllianceBernstein
2015 Retirement Portfolio-----------44%/37%/19%-----------+18.01%-------------0.18%------AllianceBernstein
Each CIT does not have prospectus just a very brief objective statement, paragraph strategy summary, paragraph risk summary and additional disclosures (e.g., stating it is a CIT, the index it follows, who manages it and that it is not a mutual fund). Asset allocation information is available on the custodian website (Fidelity NetBenefits).
How common are the use of CITs in company plans and is the level of disclosure that I describe typical?
Statistics: Posted by iim7V7IM7 — Thu Jan 02, 2025 11:11 am — Replies 11 — Views 231