Our Collective Investment Trusts put investors first.

Although CITs are generally exempt from registration with the Securities and Exchange Commission (SEC), they are regulated by other governmental bodies.

Learn more about registration Tooltip Although CITs are generally exempt from registration with the Securities and Exchange Commission (SEC), they are closely regulated under federal banking laws by the Office of the Comptroller of the Currency (OCC) or state banking regulations, depending on whether the trusts are maintained by a national or state bank. Additionally, CITs are subject to the Employee Retirement Income Security Act (ERISA) and to U.S. Department of Labor (DOL) regulations. CITs must comply with Internal Revenue Service rules in order to maintain their tax-exempt status.

As an ERISA fiduciary, Charles Schwab Trust Bank is required to make CIT investment decisions solely in the interest of participating plans and must follow the fiduciary requirements of ERISA when applicable. This additional level of fiduciary review for CIT investments gives plan participants a layer of oversight that is not required with mutual fund investments.

The benefits of investing in CITs include low cost, flexibility, and a more stable and predictable cash flow environment.

Learn more about investing in CITs Tooltip Low Cost
CITs are generally offered to retirement plans at a lower cost than a mutual fund that uses a similar strategy, primarily due to differences in their regulatory environments. This cost savings directly affects the investor by giving them the ability to save more for retirement.

Flexibility
The bank sponsoring and maintaining the CIT generally has flexibility managing investments in its CITs. This can potentially result in a product that may be able to respond more quickly to client needs and the strategic objectives of the CITs. For example, for some underlying investments the Charles Schwab Trust Bank CITs use separate account portfolios. In these cases, the Bank works with the sub-advisors to formulate guidelines and customize the accounts to fit the investment goals of the overall CIT.

Institutional Client Base
CITs can only be accessed by eligible qualified retirement plans and are not available to individual retail investors. This can lead to a more stable and predictable cash flow environment, which allows the fund to be managed more efficiently. For instance, the manager may be able to maintain a lower cash allocation and put more assets to work in the markets. Also, better cash flow visibility may reduce the risk associated with unexpectedly having to buy or sell underlying securities or other assets.

CITs are available only to eligible retirement plans and their participants.

Learn more about who can invest in CITs Tooltip Eligible retirement plans and their participants include, but may not be limited to, the following qualified plans generally

Defined Contribution (DC)
401(k) Plans (except for certain Keogh plans), Governmental 457(b) plans, Profit Sharing Plans, Stock Bonus Plans, Thrift Plans, Money Purchase Plans, Target Benefit Plans, and Taft-Hartley Plans

Defined Benefit (DB)
Pension Plans, Cash Balance Plans, Master Trusts, and Insurance Company Separate Accounts limited to investment by the above plans.

CITs can typically invest in other CITs. See the applicable declaration of trust to determine if a plan is eligible to invest in a CIT.