Trillions in Retirement Dollars Flow into Opaque Trusts

metadat

https://archive.today/8jwJl

cowsandmilk

This article feels overblown. Here’s a trust that has 250 billion, but reports prices and does many other things the article says isn’t required: https://workplace.vanguard.com/investments/product-details/f... Not opaque and it has lower fees than the retail S&P 500 funds.

0xbadcafebee

> The worry is that vital investor protections are being sacrificed in pursuit of lower costs and lesser oversight. Those concerns are likely to grow as CITs look set to become the go-to vehicle to add more private market exposure to retirement plans. The Trump administration is laying the groundwork for 401(k) investors to get easier access to assets that don't trade regularly, like real estate and private equity. > In addition, Congress is proposing a path to let CITs gobble up even more of America’s retirement savings. A current move by US lawmakers to allow the pots of public school and nonprofit employees into the trusts has been described by one member of Congress as “the single largest deregulatory action we have seen in years.” This is corruption in action. Corrupt leaders are quietly attempting to make a profit off of citizens' retirement plans, with no plan to protect those citizens once the market inevitably implodes.

jpadkins

whenever I see headlines like this, I always think: great opportunity for someone to create transparent trusts then? am I super biased or fully drank the Kool aid if I believe entrepreneurs are the solution to many of society's ills?

darth_avocado

There’s a really good video of how retirement accounts have become wall street’s favorite piggy bank to borrow from. TLDR; the money rewards bad behavior because governments are too scared to let people’s retirement accounts collapse. https://youtu.be/aRLxcx79OvE

smarm52

> Fixed income collective trust funds typically invest primarily in various types of debt instruments, such as treasury bonds, treasury bills, corporate bonds, sovereign government bonds, secured and unsecured loans, and different types of derivatives based on these instruments. There were some issues with that in The Great Recession: https://en.wikipedia.org/wiki/2008_financial_crisis . > Disadvantages include less transparency than traditional mutual funds, difficulty tracking performance, and less oversight of management. So less verifiable. That's just what you want to see related to money that millions depend on for retirement. /s https://en.wikipedia.org/wiki/Collective_trust_fund

cheriot

Why would an investment manager choose a CIT over an ETF? I can't help but think there's additional fees being collected somewhere. To adapt a popular phrase to personal finance, "If you don't understand the product, you are the product."