Demystifying the CIT for Plan Participants

Pricing aside, the investment experience between a mutual fund and CIT is substantially similar. But, there are notable differences in the participant experience. Here, we walk through those differences and participant outreach considerations when making the switch from a mutual fund to CIT.

When you hear the acronym “CIT” what do you think of? “Crisis Intervention Team”? “Career Institute of Technology?” I’m immediately taken back to my first job as a Counselor in Training at a children’s day camp. A now-faded navy blue t-shirt with the letters C-I-T printed on the back still sits in my closet.

I’ll bet if you ask the average defined contribution plan participant what a CIT is, she’d be unlikely to tell you that it’s a collective investment trust – a pooled investment vehicle owned by a bank or trust offered only through qualified employer-sponsored retirement plans.

Originally created in 1927, the CIT is only three years younger than its cousin, the mutual fund, but tends to be lesser known to individual investors despite being offered in 77% of defined contribution plans.¹The most reasonable explanation for this may be simply that information on CITs isn’t publicly available or easily searchable. Mutual funds, by comparison, are regulated by the Securities and Exchange Commission (SEC) and are offered publicly in the retail and institutional markets. With the search of a ticker symbol, things like investment objectives, strategies, risks and performance can be easily rendered. Meanwhile, CITs do not have a prospectus, but different governing documents such as a declaration of trust and investment operating guidelines which are written for, and made available to, institutional investors – that is, the DC plan sponsor. Needless to say, obtaining information about your CIT isn’t as simple as going to Google and typing in a ticker symbol. But there are ways plan sponsors and their recordkeepers can help ease the participant experience with CITs – especially if they were previously used to mutual funds.

1. Highlight the cost differential. CITs have typically lower expenses than mutual funds because they generally have lower marketing, regulatory, trading and other operational costs. They may also offer more flexibility in pricing, allowing for customized arrangements based on overall plan size. In our 2025 Global Retirement Reality Report, minimizing costs was cited by respondents as one of their top investment priorities.² When communicating a change from mutual funds to CITs, highlighting the cost savings is a no-brainer – especially when you factor in that every dollar not spent on fees is a dollar that can be invested and potentially benefit from the magic of compounding.
   
2. Minimize the perception of disruption. From an investment standpoint, there should be minimal – if any – disruption to a participant. Using the State Street Target Retirement Funds as an example, the mutual fund vehicles feature the same philosophy, process and management team, with nearly identical building blocks as the CITs. The stock/bond split is the same and de-risks in the same way. Though investing always carries with it the possibility of loss, including loss of principal, moving from a mutual fund to a CIT does not subject participants to any additional investment risk.
   
   
3. Try to replicate the mutual fund experience. While CITs are not publicly searchable in the same way as mutual funds, plan sponsors can work with their recordkeepers to curate and house factual and educational content for participant consumption. This way, when participants check their balance through their benefits site, all of the fund information is immediately available to them. Asset managers can provide fund fact sheets, which are similar to a prospectus in that they contain information on a CIT’s investment objective, strategy, risks, performance and underlying holdings. Many plan sponsors house these fact sheets on their benefits or recordkeeper’s portals -- some choosing to customize the look and feel to make them more participant friendly. In addition, recordkeepers and asset managers alike have communication specialists who can assist plan sponsors in creating supplementary educational material using a variety of mediums (print, web-based, and video to name a few).
   
   Recognizing the need for an easy investor experience, in 2019, NASDAQ, in partnership with Wilmington Trust, began offering tickers to CITs to make them more easily searchable. Until this practice becomes more widespread, the plan sponsor/recordkeeper experience will be the key to delivering participants information.
   
   
4. Make it easy. When executing a communication strategy around CITs, it’s important to prominently highlight supplemental fund information resources and make them easy to access and find. Some sponsors hyperlink fact sheets and other materials to email communications or even print and attach them to mailed notifications. Whatever materials you create or distribute, be sure to house them in a centralized portal online where they can be periodically refreshed and easy for participants to find. Ideally, this portal wouldn’t require a participant login – that would just be another barrier to accessing the information.

Easing the participant experience around the implementation of CITs in your plan is not as hard as it might seem. Despite the notable differences mentioned here, CITs and mutual funds are very similar and plan sponsors can lean on their service providers for assistance with outreach and education to ensure a positive experience for plan participants.

As for my days as a camp Counselor in Training, I never did make it to full counselor…a fact I’m reminded of dozens of times daily when I hear the acronym CIT. Such is life.