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Implementing Collective Investment Trusts (CITs): An Onboarding Overview

Plan sponsors implementing CITs as part of a qualified retirement plan will find the experience familiar, with several notable though navigable exceptions. Here, we highlight key documents and State Street’s framework for onboarding to help consultants and sponsors prepare.

Critical Documents

Several documents are referenced in the below implementation outline, some of which may differ from those typically required during mutual fund implementation. Quickly defined, they are:

  1. Contract – the Participation Agreement (PA)
    Why it’s important: This outlines the terms of service and fees between the client and State Street.
  2. State Street Transaction Security Form
    Why it’s important: This Authorized Signers list establishes trading procedures that State Street will follow for your account.
  3. Letter of Direction (LOD)
    Why it’s important: This letter documents the initial contribution into the account, including account details, value and trade date.

The CIT Onboarding Timeline

A typical onboarding can be considered in three steps, with a targeted timeframe of ten days to implementation.

1.  Day 1: Client provides State Street with Plan Document and W9

These documents are important for several reasons. First, they enable State Street to begin drafting documents, including the Participation Agreement. Once drafted, the P.A. is sent for client review along with the Transaction Security form, or trading document, and other materials. Importantly, obtaining the Plan Document and W9 also allows State Street to start the Anti-Money Laundering/Know Your Plan (AML/KYC) review.

Helpful hint: Inconsistencies in the legal plan name shown on the plan document and W9 can create delays in execution of the Participation Agreement.

2.  Day 2-9: Participation Agreement negotiated; P.A. and Transaction Security Form executed

Although a plan sponsor may rely on counsel to review documents, we encourage plans to also ensure that document details such as fees and the scope of service are aligned to expectations.

During this step, State Street and the plan recordkeeper are often in regular communication to discuss the transition. The plan sponsor does not need to participate in every discussion — our dedicated onboarding team will provide updates as onboarding progresses.

State Street will also wrap up the AML/KYC process during this step.

Helpful hints: Negotiation of terms is a common cause of delay. Another delay seen during this step occurs when a recordkeeper does not have connectivity to National Securities Clearing Corporation (NSCC) or an alternative clearinghouse. In this case, the CIT provider may need to take extra steps during this step to ensure seamless trading.

3.  Day 10: Account Funding

Once the AML/KYC review has concluded and documents are fully executed, the P.A. and information including account details are provided to client. At this time, trading can begin.

We know parts of this onboarding process may feel unfamiliar to plan sponsors. It’s important to note that asset managers including State Street have offered CITs for decades. Our centralized onboarding team has processed hundreds of transitions and completes 100 contracts in an average month. Throughout onboarding, the team works closely with a plan’s stakeholders including recordkeepers, trustees, custodians and transition managers with the goal of delivering a seamless start.

For more information on the CIT onboarding experience, contact

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