The shift toward collective investment trusts (CITs) in 401(k) plans is accelerating—driven largely by the push for lower fees. But cheaper doesn’t always mean better. While CITs can reduce costs, they often come with trade-offs in transparency, performance history, and comparability to mutual funds, leaving many plan sponsors navigating unfamiliar territory.
As adoption grows, so do the risks: inconsistent pricing, limited visibility, and potential conflicts of interest are forcing fiduciaries to look beyond cost alone. Today’s plan sponsors must weigh value, structure, and participant impact while documenting decisions more carefully than ever. In a market moving quickly toward CITs, education and due diligence are no longer optional—they’re essential.
Fred Barstein covers this and more in his latest WealthManagement article, “Do 401(k) Plans Have to Use a Lower Cost CIT?“
