Modernizing CIT Operations to Support the Next Phase of Growth
Collective investment trusts (CITs) have seen rapid growth in recent years, driven by increasing demand from 401(k) and other retirement plan sponsors, advisors, and institutional investors seeking additional cost-efficient and flexible investment structures. That growth has delivered clear benefits for plans and their participants, but it has also placed new strains on operational frameworks that were not designed to support today’s scale or complexity of CIT offerings.
Assets of Large 401(k) Plans Are Increasingly Held in Collective Investment Trusts
Percentage of assets in large 401(k) plans*
* Large 401(k) plans are those that filed Form 5500 Schedule H (typically plans with 100 participants or more).
Note: Assets exclude Direct Filing Entity assets that are reinvested in collective investment trusts. Data prior to 2023 come from the Form 5500 Research data sets released by the Department of Labor. Data for 2023 are preliminary, based on Department of Labor Form 5500 latest data sets.
Source: Investment Company Institute calculations of Department of Labor Form 5500 data. 2025 Investment Company Fact Book, available at https://www.icifactbook.org/pdf/2025-factbook.pdf.
To help address the challenge of modernizing CIT operations, members of ICI’s Bank Trust and Retirement Advisory Committee and Broker Dealer Advisory Committee released An Overview of Operating Collective Investment Trusts at Scale, a white paper that identifies core operational constraints, outlines practical modernization strategies, and offers a framework for implementing operational change across the CIT ecosystem.
Scaling Operations to Match Demand
While CIT adoption has grown rapidly, the operational infrastructure supporting CITs is still evolving. Many operational processes rely on legacy workflows and manual coordination across service providers, creating opportunities for modernization as volumes scale. Rather than reflecting resistance to innovation, we understand that these challenges often stem from structural inertia—CIT systems and processes were originally designed for a much different market environment than exists today or in the future.
ICI’s recently launched CIT resource hub provides a single place for operational, policy, and legal information and resources for our CIT members and committees, including the CIT Advisory Committee and the CIT Administrative Subcommittee.
Automation as a Foundation for Scalable Operations
CITs should consider adopting an operational model centered on automation and relying more heavily on automated processing services. Using mutual funds as an example, the paper suggests a path forward for CITs and provides concrete steps that providers, intermediaries, trustees, and others in the CIT industry can consider taking to modernize existing operational structures.
From Advocacy to Operational Support
The need to modernize CIT operations is becoming even more urgent as policymakers consider further expanding access to these products. Lawmakers are currently considering an ICI-backed bill that would give retirement savers working in the nonprofit, education, and health care sectors access to the same broader range of investment options currently enjoyed by 401(k) plan investors.
The Retirement Fairness for Charities and Educational Institutions Act, which passed the House of Representatives in December 2025 as a provision of the INVEST Act, would allow 403(b) retirement plans to utilize CITs as plan investment options. More than 10 million Americans have 403(b) plans, with $1.5 trillion held in 403(b) plans at the end of Q3 2025.
If enacted, this legislation would further increase demand for CITs—heightening the importance of operational models that can scale efficiently and reliably.
From advocating for greater CIT access across retirement plans to identifying modernization strategies and supporting their implementation, ICI is focused on helping members ensure that CITs can meet rising demand while maintaining the high standards plan sponsors and participants expect.