Asset managers are increasingly building alternatives for 401(k) plans as collective investment trusts (CITs), and the plumbing is already in place. Among 401(k) plans with more than 100 participants whose filings list their holdings, more than 27,000 held at least one CIT in 2024, about half, up from 48% in 2022. And nearly half of everything these plans list, some $3.7 trillion, now sits in CITs, up from 44% two years earlier.

The share of plans holding a CIT keeps rising

We looked at 53,309 401(k) plans with more than 100 participants whose 2024 Form 5500 Schedule H lists their investments. Of these, 27,213 (51%) held at least one CIT. That share has grown each year:

| Plan year | Plans holding a CIT | CIT share of listed holdings | | ---------- | ---------- | ---------- | | 2022 | 48.0% | 44.4% | | 2023 | 49.6% | 46.2% | | 2024 | 51.0% | 48.7% |

The plans that hold a CIT have $6.77T in total assets. Across all the plans we looked at, $3.73T of listed holdings sits in CITs, close to half. The dollar share is rising faster than the plan count, so plans that already use CITs are putting more money into them.

Why this matters for alternatives

A plan that already holds a CIT has done the work a new one requires: its fiduciaries have reviewed a non-registered vehicle and its recordkeeper can trade and value it. That lowers the cost of adding a CIT that includes private real estate, private credit or infrastructure. Many asset managers building DC alternatives are using the CIT structure for this reason.

The adoption figures need some context, though. About 9,900 of the plans that hold a CIT hold only a stable-value or cash CIT. Those are often chosen by the recordkeeper and not as a deliberate investment decision. About 17,300 plans use CITs for their core investment lineup, and those plans are the clearer opening for an alternatives CIT.

Where alternatives sit today

Private alternatives are still rare. Only about 1,000 of the 53,309 plans hold any private real estate, infrastructure or credit. Most of that exposure is in insurance-company separate accounts, mainly Principal U.S. Property and the TIAA Real Estate Account:

| How it’s held | Plans | Assets | | ---------- | ---------- | ---------- | | Insurance separate accounts | 927 | $1.64B | | CITs | 37 | $2.03B |

Today, alternatives held in CITs reach few plans but carry more money per plan. If CITs keep spreading at their current pace, that may change.

Methodology

Our source is Form 5500 Schedule H filings (U.S. Department of Labor) for 401(k) plans with more than 100 participants that list their holdings. Plan years run 2022–2024. We identify CITs from the filed holdings, and we classify stable-value and cash CITs from fund names, so those counts are approximate.

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Originally posted on LinkedIn.