PLANSPONSOR - August/September 2020 - 11

He argues that, despite these considerations,
CITs can be a cheap and flexible
option for a plan. They are not governed by
the SEC but the Office of the Comptroller
of the Currency (OCC), which makes fewer
regulatory demands than the SEC makes
on mutual funds. This greater freedom
from regulation results in lower costs,
which benefits investors.
In a July webinar conducted by
Wilmington Trust, Rob Barnett, group
vice president and head of intermediary
sales distribution, credited CITs' flexibility
and customizability for their growing
popularity, even for smaller plans.
CIT adoption has been encouraged by
the fact that investment firms have simplified
implementing these products, across
the board, Barnett added. " The industry
has made it easier for us to produce those
quarterly investment reports and deliver
real data to be able to show the attractiveness
of CITs and evaluate them against '40
Act mutual funds, " he said.
A further perceived drawback to many
participants is they do not understand the
fees. Menasco recommends employers
search for prudent options for their plan
as well as that they benchmark fees.
According to the 2019 PLANSPONSOR
Defined Contribution Survey, only 48% of
plan sponsors overall have benchmarked
plan fees in general. If there are some CITs
that offer the same strategies as others but
at a reduced price, plan sponsors should
consider those, he says.
" If sponsors have a mutual fund
lineup, introducing other types of asset
vehicles into it may be a cause for pushback
by the investor, " he cautions.
Carefully consider current plan fees
vs. alternative options' fees, to avoid any
future litigation, urges Robb Muse, a senior
vice president with SEI Trust Co. Most
poor decisions called out in these suits
could have been avoided, had employers
prudently reviewed fees, he says. " Each
decision they make in regard to their plan
on the investment side will be held to a
fiduciary standard. " -Amanda Umpierrez
TIDBITS
Involuntary Retirement
Almost 2 million older
workers-those between the
ages of 55 and 70-left the
labor force in the first three
months after the start of the
Great Recession, in 2007.
Since March of this year,
2.9 million older workers
have left the labor force.
Source: The New School's Retirement Equity Lab
1.9 mm
2007
2.9 mm
2020
Toss Out the Labels
80%
It's a Gift
Appreciation
for awards of
company stock
is growing,
especially when
plan sponsors
explain these
in the context
of one's overall
financial picture.
42%
of employees
valued their equity
awards
26%
of employees
valued their equity
awards
2013
Source: UBS Participant Voice, Issue 4
2019
said their financial
views were shaped by
life experiences and
their background-
not by their generation.
Source: Empower Institute, " It's Not About Generations " (white paper)
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