Collective investment trusts are growing in popularity among large companies seeking to provide employees with lower-cost retirement savings options, but some experts worry that these plans don't offer investors enough disclosure.

Companies with thousands of employees have been using these trusts to pool money from participants and invest in stocks, bonds and alternatives. According to Morningstar Inc., approximately 70% of companies with 1,000 employees or more offer collective trusts. Approximately 45% of 401(k) plans currently include collective trusts.

Morningstar said it has more than 1,150 collective trusts in its database. Collectively, these vehicles hold about $1.6 trillion in assets, with about half their assets in 401(k)s and half in pension plans.

Created in the late 1920s, collective trusts are popular among pension managers due to their low fees and flexibility. Unlike mutual funds, these trusts are managed by a bank or trust company and are overseen by federal banking regulators, not the Securities and Exchange Commission.

Workers participating in collective trusts receive very little performance documentation and typically receive a quarterly report. Rollovers into 401(k)s and individual retirement accounts are also more complicated through collective trusts.

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