Background: Over the past 18 months, the DCIIA Retirement Research Center (RRC) has conducted research to evaluate the current state and future trajectory of collective investment trusts (CITs) in the defined contribution (DC) marketplace. This effort culminated in a new report, A Look Ahead: The Future of Collective Investment Trusts. The research drew on three sources: the DCIIA RRC 2025 CIT Survey, industry interviews, and expertise from several RRC partners, including Escalent, Morningstar, and Cerulli.

Our findings reveal four key themes that suggest CITs may continue moving down market by gaining traction with a wider range of retirement plans across the DC spectrum, including 403(b), multi-employer (MEP), non-qualified, and pooled employer plan (PEP) markets.

Findings: The research identified four overarching themes: cost savings, innovation, adoption, and transparency and education, which together are shaping the future of CITs.

Cost savings: Nearly all survey respondents (96%) identified cost reduction as the primary driver of CIT adoption. In partnership with Morningstar, we also found that the average expense ratio for collective funds is lower than that of mutual funds.

Innovation: The expanded use of CITs within DC plans to deliver alternative investments, such as private equity and private credit, has been bolstered by recent regulatory momentum in Washington. In addition, retirement income solutions represent a new growth frontier for CITs, as they can be structured to include insurance-based products.

Adoption: Mid-sized plans are expected to be a major driver of CIT adoption over the next 18 months, according to three-quarters of survey respondents. About half also anticipate that smaller plans will increase their uptake of CITs during the same period.

MEPs and PEPs represent additional growth channels, as they can leverage pooled assets to take advantage of negotiated pricing.

Regulatory changes could potentially enable 403(b) plans to invest in CITs, which might expand access to millions of participants in tax-exempt organizations.

Transparency and education: Limited consumer-facing information about CITs continues to negatively impact transparency and understanding. Education will be necessary, particularly for smaller plans, to help explain CIT structures and how they operate.

Bottom Line: CITs have gained broad acceptance among DC plan sponsors through their use in target date funds (TDFs) and stable value funds, and their momentum is likely to continue as they capture additional market share. The growth of CITs represents an important step in the evolution of DC plans—their cost advantages and capacity for innovation position them as a preferred vehicle for many plan sponsors.