Putnam CITs

Collective investment trusts can help participants save more for retirement.

With lower expenses and flexible pricing, CITs are an attractive option for qualified retirement plans.

CITs (collective investment trusts) are tax-exempt, pooled investment vehicles that are administered by banks and trust companies. CITs are managed according to a defined investment objective and investment strategy, which can mirror an existing mutual fund. However, CITs are only available to qualified retirement plans, while mutual funds have no restrictions. This difference provides CITs with lower administrative, management, and communications expenses, among other benefits.

CITs are rising in popularity as the retirement industry places a greater focus on pricing and design flexibility.

More plan sponsors are adding CITs as a complement or alternative to mutual funds.

Putnam has many offerings in a CIT structure for you to consider.

See our strategies.

Key advantages for plan sponsors

Access to institutional-quality investment strategies

Compliance with ERISA fiduciary standards

Flexible pricing structure to serve various markets

Lower fees that add value to retirement plans

Daily valuation and liquidity, in most cases

Transparency and recordkeeping platforms

Exposure to a wide range of investment categories

Frequently asked questions | CITs

What are the key attributes of a CIT that a plan sponsor should know?

A CIT is like a mutual fund in being a pooled investment vehicle, but has less burdensome reporting and administrative requirements, which can result in cost savings. CITs are established by banks or trust companies that act as fiduciaries. CITs are not available to individual investors.

How are CITs regulated?

CITs are under federal supervision through the Office of the Comptroller of the Currency (OCC). At the state level, bank regulatory authorities also provide oversight.

What role does the SEC play in CIT regulation?

Supervised by the OCC, CITs are exempt from regulation by the SEC. The Securities Act of 1933 and the Investment Company Act of 1940 are not the key laws governing CITs. These differences in the regulatory structure create potential cost advantages for CITs relative to mutual funds as investment options in a plan.

What type of qualified plans may invest in CITs?

ERISA-qualified defined contribution (DC) and defined benefit (DB) plans may use CITs. CITs are not available for 403(b) plans, 457(f) plans, or IRAs.

How do CITs trade?

CITs operationally look just like mutual funds and trade via the National Securities Clearing Corporation (NSCC).

If you have additional questions, call your Putnam DC Investment Specialist at 1-866-478-8626.

Download our complete CITs FAQs (pdf)