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Although they have been available for decades, early versions of collective trusts provided investors with little access to underlying holdings data and were valued infrequently, typically only once per quarter. As a result, collective trusts were quickly overshadowed by mutual funds, which provide
100:. However, when collective trusts are composed of IRA assets or so-called “Keogh plans,” or marketed to the public, some or all of these securities law exclusions and exemptions may not be available; in these situations, registration under one or more federal securities laws could be required.
141:. In addition to equity strategies, collective trusts also pursue a wide range of fixed income strategies, including actively managed strategies, passive strategies and others. Fixed income collective trust funds typically invest primarily in various types of debt instruments, such as
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CITs have existed since 1927. Their size in assets and importance in the retirement and pension fields have grown significantly in recent years. Estimated assets in collective trusts as of the end of 2016 exceeded $ 1.4 trillion. In many ways, CITs are similar to
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strategies). In addition, in recent years collective trusts have pursued their investment strategies by employing more innovative investment techniques, such as investing in other investment vehicles or using more innovative investment instruments, such as
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and greater transparency. However, given the later focus on retirement plan fees and full disclosure, and in light of technological advances, collective trusts have gained market share in the defined benefit and defined contribution markets.
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administered by a bank or trust company that combines assets for multiple investors who meet specific requirements set forth in the fund’s declaration of trust. Typically, a collective trust pools assets from corporate and governmental
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market, as of 2016 growing to over $ 1.5 trillion in assets and comprising over 20% of defined contribution plan assets.
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92:. In addition, transactions involving interests in collective trusts generally do not require an entity to register as a
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Collective trusts are often used in connection with defined benefit plans and, when they can be valued daily, with
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and stock bonus plans, and charitable and other tax-exempt trusts. While operating in many respects similar to a
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177:, difficulty tracking performance, less oversight of management, and an inability to rollover to an
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88:, and interests in these funds are generally exempt from registration under Section 3(a)(2) of the
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U.S. Defined
Contribution Distribution 2017: Re-Evaluating the Use of CITs in DC Plans
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Among the advantages of collective trusts versus other investment vehicles are:
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Getting Ahead of the CIT Boom: Aligning
Capabilities to Capture DC Market Share
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as well. Collective trusts generally are excluded from the definition of an “
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loans, and different types of derivatives based on these instruments.
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329:"Why Your 401(K) is Switching to Collective Investment Funds (Cifs)"
299:"Reforming Pensions While Retaining Shareholder Voice"
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Use of CITs in DC plans booming, rises 68% since 2008,
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or model-driven) or actively managed (e.g., pursuing
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124:spectrum. These strategies may be passive (e.g.,
249:Pensions and Investments (Feb. 22, 2016); SEI,
40:, a collective trust is not regulated by the
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282:Collective Trusts and Other Commingled Funds
199:Collective Trusts and Other Commingled Funds
112:Collective trusts pursue a wide variety of
262:15 U.S. Code §§80a-3(c)(11) and 77c(a)(2).
104:investor friendly features such as daily
46:Office of the Comptroller of the Currency
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42:U.S. Securities and Exchange Commission
284:, §4:02 (Law Journal Press, 2015 ed.).
201:, §1:02 (Law Journal Press, 2015 ed.).
369:Retirement plans in the United States
219:Coalition of Collective Trust Funds,
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84:” under Section 3(c)(11) of the
98:Securities Exchange Act of 1934
50:U.S. Department of the Treasury
153:, sovereign government bonds,
86:Investment Company Act of 1940
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179:Individual Retirement Account
48:(OCC), a division within the
303:Boston University Law Review
221:Collective Investment Trusts
21:Collective Investment Trusts
96:under Section 15(a) of the
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78:defined contribution plans
271:15 U.S. Code §78c(a)(12).
210:12 C.F.R. §9.18(a)(2).
90:Securities Act of 1933
17:Collective trust funds
139:exchange-traded funds
114:investment strategies
232:Cerulli Associates,
62:defined contribution
364:Financial services
171:economies of scale
82:investment company
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349:Wills and trusts
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295:Webber, David H.
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280:Lemke and Lins,
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253:(Apr. 16, 2012).
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165:Pros and cons
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23:(CITs) are a
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311:. Retrieved
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175:mutual funds
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122:fixed income
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58:mutual funds
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313:18 November
116:across the
38:mutual fund
25:legal trust
343:Categories
185:References
106:valuations
159:unsecured
354:Pensions
297:(2019).
245:Steyer,
72:Overview
359:Banking
236:(2017).
223:(2015).
155:secured
126:indexed
34:pension
309:: 1018
130:growth
118:equity
66:401(k)
134:value
315:2019
157:and
120:and
132:or
19:or
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