{"id":9709,"date":"2022-02-17T09:38:30","date_gmt":"2022-02-17T14:38:30","guid":{"rendered":"https:\/\/rixtrema.com\/blog\/?p=9709"},"modified":"2022-02-24T09:06:00","modified_gmt":"2022-02-24T14:06:00","slug":"cits-in-the-401k-field-the-price-of-change","status":"publish","type":"post","link":"https:\/\/rixtrema.com\/blog\/cits-in-the-401k-field-the-price-of-change\/","title":{"rendered":"CITs in the 401(k) Field: The Price of Change"},"content":{"rendered":"\n
<\/div>\n\n\n

CIT\u2019s are an essential part of most 401(k) plans nowadays, and they\u2019re even becoming available for smaller plans, and more widely used among plan sponsors. According to the <\/span>Cerulli Associates<\/a><\/strong>\u2019 research, plan sponsors\u2019 pursuit of lower-cost alternatives, lead to CIT\u2019s gradually capturing the mutual funds\u2019 market share in the beginning of 2021.<\/span><\/p>\n

The key benefit of using CIT\u2019s in 401(k) plans is cost-efficiency; plan sponsors are looking for ways to save as many  basis points and as possible , by choosing CIT\u2019s rather than similar mutual funds.  Although they are, technically speaking,  functionally identical, CIT\u2019s are often less expensive than their more traditional equivalents.<\/span><\/p>\n

CIT\u2019s are also getting more popular than target-date mutual funds. As an earlier publication by Morningstar <\/span>showed<\/a><\/strong>, around 43% of all target-date assets in 2020 were invested in CITs, which is a significant increase from less than 20% of target-date assets that had been invested in CIT\u2019s, back in 2014.<\/span><\/p>\n

CIT\u2019s are becoming <\/span>more widely available<\/a><\/strong>, as they\u2019re now also included in many smaller retirement plans.<\/span><\/p>\n

<\/p>\n

But there are several disadvantages that still prevent advisors from confidently recommending them to their clients:<\/span><\/p>\n

    \n
  1. CIT\u2019s have lesser regulatory requirements, which makes them less transparent for employees and consultants to use.<\/span><\/li>\n
  2. On the other hand, CIT\u2019s have greater due diligence requirements from plan sponsors and advisors, which makes it harder to benchmark them and review the advisors\u2019 services and fees.<\/span><\/li>\n
  3. CIT\u2019s don\u2019t have the same portability as mutual funds, as plan participants are first required to liquidate their CIT\u2019s to cash before they could roll them over to a qualified account.<\/span><\/li>\n<\/ol>\n

    All that being said,  it is clear that the implementation of CIT\u2019s is on the up  for a reason. However there are still some legitimate obstacles that make using these new opaque investment vehicles difficult to invest in, so many advisors would still prefer more classical options to CIT\u2019s.<\/span><\/p>\n

    With the deep investment analytics tool called <\/span>401kFiduciaryOptimizer<\/a><\/strong> developed by RiXtrema, you can easily compare mutual funds to CIT\u2019s (and vice versa), and find the best low-cost alternatives with better performance, and then compose a comprehensive report for a plan sponsor you\u2019re working with, or win a new prospect.<\/span><\/p>\n\n\n

    <\/div>\n\n\n\n
    \"\"<\/a><\/figure><\/div>\n","protected":false},"excerpt":{"rendered":"

    CIT\u2019s are an essential part of most 401(k) plans nowadays, and they\u2019re even becoming available for smaller plans, and more widely used among plan sponsors.<\/p>\n","protected":false},"author":11,"featured_media":9710,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[211,168],"tags":[82,41,7,12],"class_list":["post-9709","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-401k-fiduciaryoptimizer","category-news","tag-401k","tag-401kfiduciaryoptimizer","tag-financial-advisor","tag-financial-advisors"],"jetpack_featured_media_url":"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/02\/The-Price-of-Change.jpg","yoast_head":"\nCITs in the 401(k) Field: The Price of Change<\/title>\n<meta name=\"description\" content=\"CIT\u2019s are an essential part of most 401(k) plans nowadays, and they\u2019re even becoming available for smaller plans, and more widely used among plan sponsors.\" \/>\n<link rel=\"canonical\" href=\"https:\/\/rixtrema.com\/blog\/cits-in-the-401k-field-the-price-of-change\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CITs in the 401(k) Field: The Price of Change\" \/>\n<meta property=\"og:description\" content=\"CIT\u2019s are an essential part of most 401(k) plans nowadays, and they\u2019re even becoming available for smaller plans, and more widely used among plan sponsors.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/rixtrema.com\/blog\/cits-in-the-401k-field-the-price-of-change\/\" \/>\n<meta property=\"og:site_name\" content=\"RiXtrema.com\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LarkspurRiXtrema\/\" \/>\n<meta property=\"article:published_time\" content=\"2022-02-17T14:38:30+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-02-24T14:06:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2022\/02\/The-Price-of-Change.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1800\" \/>\n\t<meta property=\"og:image:height\" content=\"1029\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@RiXtrema\" \/>\n<meta name=\"twitter:site\" content=\"@RiXtrema\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data1\" content=\"2 minutes\">\n<!-- \/ Yoast SEO Premium plugin. -->","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts\/9709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/comments?post=9709"}],"version-history":[{"count":7,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts\/9709\/revisions"}],"predecessor-version":[{"id":10805,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts\/9709\/revisions\/10805"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/media\/9710"}],"wp:attachment":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/media?parent=9709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/categories?post=9709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/tags?post=9709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}