Collective Investment Trusts
A Collective Investment Trust (CIT) is a pooled group of trust accounts operated by a trust company or a bank. Collective Investment Trusts combine the assets of various individuals and organizations to create a larger, well-diversified portfolio.  Many individual employees encounter CITs through their investment in employer provided contributory retirement plans. There are two types of CITs:
- A1 Fund: A fund of grouped assets contributed by either the holding bank or affiliated banks for the exclusive purpose of investment and reinvestment. These funds are usually called Collective Investment Funds.
- A2 Fund: A fund of grouped assets contributed by pension, profit sharing, retirement, or other trusts that are exempt from federal income tax. This is the plan type that most employees encounter with company retirement plans.
CITs are not regulated by the Investment Company Act of 1940 but are regulated by the Office of the Comptroller of the Currency (“OCC”) and subject to oversight by the Internal Revenue Service (“IRS”) and the Department of Labor (“DOL”). 
CITs date back to 1927. In 1936 Congress amended the Internal Revenue Service Code to provide tax-exempt status to certain bank CITS. In 1955 the Federal Reserve authorized banks to combine funds from pensions, profit sharing and stock bonus plans and the IRS determined that such funds could be exempt from tax. As a result, CITs became the popular choice for defined benefit plans. In 2000 the National Securities Clearing Corporation added CITs to its mutual fund trading platform, allowing CITs to trade daily and as fluidly as mutual funds.  As a result, CITs have become a larger component of the defined contribution plan product menu.  (see Figure 1.)
The following pension plans are eligible to invest in CITs:
- Qualified 401(k) plans
- Qualified profit sharing plans
- Qualified stock bonus plans
- Qualified pension plans
- 401(a) government plans
- 457(b) government plans
- Certain separate accounts and contracts of insurance companies 
CIT special characteristics
CITs have a number of special characteristics:
- Costs. Because CITs are only offered to large institutional accounts, do not deal with retail investors, and have lower regulatory costs than do mutual funds, they generally have lower costs. In 2010, the average cost of CITs was 0.58%.
- Reporting requirements. The CIT spells out the terms and guidelines under which the investments of the trust are managed in a Declaration of Trust (a mutual fund uses a prospectus). There are no annual or semiannual reports. Unlike a mutual fund, a CIT has no ticker designation. In addition, while Morningstar provides a proprietary database of CIT performance data for more than 1000 US collective trusts, this service is only made available to institutional investors, consultants, retirement plan sponsors, endowments, and foundations and is not available to individual investors. The company contributory plan will usually provide the planholder with factsheet disclosure and performance information.
- Dividend reinvestment. A CIT does not make dividend distributions. Dividends are added and accumulate in the net asset value of a CIT share.
- definition, investopedia
- The Re-Emergence of Collective Investment Trust Funds, Manning & Napier, June 2011.
- Northern Trust Announces New Collective Trust Fund Investment Products. Bank-Sponsored Vehicle Provides Efficient Access to Defined-Contribution Market., PR Newswire, (March 22, 2012)
- Low-fee collective investment trusts may be coming to 401(k), News telegram.com (March 10, 2010)
- Vanguard - Collective trusts: When are they appropriate?[dead link], Vanguard 9/24/10, which further notes the following:
Source: Morningstar, August 31, 2010. In many cases, fees for collective trusts are negotiable and can have break points based on investable assets, but generally do not include audit and custody costs.
- Collective Investment Trust Database - Overview, Morningstar
- Here is an actual factsheet disclosure document, Schwab CIT Factsheet, 12/31/2011.
- Comptrollers Handbook of CITs, Comptroller of the Currency
- The Re-Emergence of Collective Investment Trust Funds, Manning & Napier, February 15, 2014.
Selective list of CIT management firms
- BlackRock Collective Trust Funds
- Federal Thrift Savings Plan, using BlackRock Collective Trust Funds
- Charles Schwab Bank Collective Trust Funds
- Vanguard Collective Trust Funds
- Elton, Edwin J. and Gruber, Martin J. and Blake, Christopher R., The Performance of Separate Accounts and Collective Investment Trusts, (June 21, 2012). Fordham University Schools of Business Research Paper No. 2089044. Available at SSRN.