401(k) Plans Move to Collective Trusts

CITs Offer Lower Fees, But Less Transparency


By John Morgan

July 28, 2008

BOSTON - Workers love pension plans, but providing 20 to 30 years of benefits to a huge retired workforce can cripple most companies' profits. As more firms drop their defined benefit pension plans in favor of defined contribution 401(k)s, institutions are looking for qualified default investment alternatives to mutual funds, such as collective investment trusts (CITs) and separately managed accounts (SMAs), to provide employees with pension-like features.

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