Portfolio construction

The rise of collective investment trusts in retirement plans

September 29, 2025 - 3 min

Senior Vice President, Head of Institutional Product and ETFs – Natixis Investment Managers – US Distribution

Collective investment trusts (CITs) have played a foundational role in institutional investing for nearly a century. Trust companies introduced CITs in the 1920s to pool assets for fiduciary accounts. They aimed to provide efficient, cost-effective investment management for retirement plans and other tax-qualified entities. This article explores the historical development, regulatory evolution, and current role of CITs.

What are CITs, and why are they so popular?

A CIT is a tax-exempt, pooled investment vehicle maintained by a bank or trust company for certain Employee Retirement Income Security (ERISA) Act–qualified retirement plan clients. The use of CITs was formalized under banking regulations and gained further legitimacy with the passage of the ERISA Act in 1974, which recognized CITs as eligible investment vehicles for qualified retirement plans.

Unlike mutual funds, CITs are not registered with the Securities and Exchange Commission (SEC). Instead, they are regulated by the Office of the Comptroller of the Currency (OCC) and the Internal Revenue Service (IRS). This regulatory framework allows CITs to generally operate with lower administrative and marketing costs, often resulting in more competitive fee structures for plan sponsors and participants. Historically, CITs were primarily used by large defined benefit (DB) plans, but over the past two decades, their adoption has expanded significantly into defined contribution (DC) plans, particularly 401(k)s.

Fast facts: CIT vs. mutual fund

Regulatory evolution and key milestones in CIT development:

The future of retirement accounts: CITs in 403(b) plans?

As regulatory scrutiny intensifies and fee transparency becomes paramount, we believe CITs are poised to play an even greater role in shaping the future of retirement investing. Historically, 403(b) plans – primarily used by public schools, universities, and nonprofit organizations – have been limited to mutual funds and annuity products due to regulatory constraints.

Recent industry discussions and regulatory developments suggest that CITs may soon become eligible investment options within 403(b) plans. If approved, this shift could unlock cost savings and fiduciary flexibility for nonprofit plan sponsors, aligning 403(b) governance more closely with 401(k) best practices.

Natixis Investment Managers views this potential expansion as a critical opportunity to bring institutional-grade investment solutions to a broader segment of the retirement market. The firm is actively monitoring regulatory developments and preparing to support advisors and sponsors in the 403(b) space with CIT implementation strategies and education.

Natixis’ commitment to CIT innovation

Natixis Investment Managers' affiliates offers 23 CITs across a diverse range of asset classes and strategies, managed by five leading affiliates:

Harris | Oakmark – Value-oriented equity strategies
Loomis, Sayles & Company – Fixed income and multi-asset strategies
Mirova US – Environmental, social, and governance (ESG)-integrated and sustainable investment solutions
AEW – Real estate investment strategies
Vaughan Nelson Investment Management – High-conviction equity portfolios

These offerings reflect Natixis’ commitment to delivering cost-efficient and customizable investment solutions for retirement plans. Whether through core fixed income or ESG-focused equity, Natixis leverages its multi-affiliate model to meet the evolving needs of plan sponsors and financial advisors.

Key takeaways

CITs were introduced in 1927 and have evolved to become popular in DC plans due to their cost-efficient attributes.
Although 403(b) plans are not currently eligible to invest in CITs, proposed legislation may make it possible to include CITs in 403(b) plans.

Solutions for consultants and DC plan sponsors

Natixis Investment Managers' affiliates offer a wide range of CITs managed by five active investment managers.

Learn more

Let's connect

Learn more by contacting a Natixis Retirement specialist.

The information provided does not constitute investment advice, and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon.

There can be no assurance that any investment will achieve its stated investment objective. All investing involves risk, including the risk of loss of principal. There are risks associated with equity, fixed income, and alternative investments. Diversification does not guarantee a profit or protect against a loss.

Collective investment trusts (CITs) are pooled investment vehicles that are maintained by a bank or trust company. CITs are generally available only to certain qualified retirement plans and are not publicly traded. CITs are exempt from registration under federal securities laws and exempt from registration under the Investment Company Act of 1940. CITs are subject to federal and state banking regulations. Mutual funds are pooled investment vehicles regulated by the Securities and Exchange Commission (SEC). They are publicly traded and typically offered to both retail and institutional investors. Investments in either a mutual fund or CIT are not insured by the FDIC, and are not deposits, obligations of, or endorsed or guaranteed in any way by any bank.

Natixis Investment Managers’ distribution and service groups include Natixis Distribution, LLC.

NIM-09102025-0bad0njx