One of Mr. Francis’s clients is CentroMotion, Waukesha, Wis., the parent company of several machinery subsidiaries. The CentroMotion 401(k) Plan switched to a collective investment trust target-date series from a mutual-fund series in March, both of which were managed by T. Rowe Price Group Inc.

The move saved about $22,000 in overall plan costs and reduced target-date series costs by about 10%, said Angela Fischer, director of HR Services.

Target-date assets of $55 million are the biggest component of the $87 million plan, which has 14 other investment options, none of which are CITs.

“This is an important employee benefit,” said Ms. Fischer, who noted “it didn’t take long” for plan fiduciaries to review and implement the proposal recommended by Francis Investment Counsel. Plan executives explained the change to participants, and there was no negative feedback from them, she said.

Another Francis Investment Counsel client, Regal Ware Inc., also switched its T. Rowe Price target-date series to a CIT version from a mutual fund version for the Regal Ware Inc. Profit-Sharing Plans.

“We were doing the right thing for participants in reducing costs,” said David Lenz, chief operating officer of the Kewaskum, Wis.-based cookware company.

The plans — a combined $52 million assets in two profit-sharing plans for union members and salaried employees — saved approximately $30,000 a year in total plan costs, he said. The target-date series represents 35% to 40% of the assets of the plans. Regal Ware made the switch in October 2021, sending mailings and emails to participants 30 days in advance. There were no negative comments, Mr. Lenz said.

Mr. Francis said the sounds of silence has accompanied the switch to CITs from other clients’ participants, too. “They perceive it as good news,” he said.

Mr. Francis said plans must be selective in choosing a CIT. “We require a three-year track record” before considering a CIT as a possible investment option, said Mr. Francis, adding that his firm has rejected the pitches of 20 CITs from various providers due to no cost savings, no track record or a different strategy than the mutual fund for which the CIT is designed to replace.

The use of CITs in smaller plans “has picked up the pace in the last 18 to 24 months,” added Mr. Kaminski of Fiducient Advisors. “I think it’s sponsor-driven,” he said. “A sponsor will say I found an investment product that I like but I want to do something more efficient.”

Responding to what he called “an extremely tight labor market,” DC consultant Joe DeBello said “sponsors are doing anything they can to cut costs,” which includes offering CITs. Mr. DeBello, the Orlando, Fla.-based managing consultant for OneDigital Retirement Services, said his clients typically have DC assets of $25 million to $50 million, although some have as high as $250 million. “We are seeing CITs in startup plans,” he said.

“The average participant is more interested in the cost and performance of a product” rather than the underlying structure of an investment option, Mr. DeBello said. When clients switch from a mutual fund investment to a CIT, “we see zero dropouts,” he added. “I’ve never talked to a participant who said ‘no.'”