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M&T Bank Corporation’s European subsidiaries (Wilmington Trust (UK) Limited, Wilmington Trust (London) Limited, Wilmington Trust SP Services (London) Limited, Wilmington Trust SP Services (Dublin) Limited, Wilmington Trust SP Services (Frankfurt) GmbH and Wilmington Trust SAS) provide international corporate and institutional services.

WTIA, WFMC, and WTIM are investment advisers registered with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply any level of skill or training. Additional Information about WTIA, WFMC, and WTIM is also available on the SEC's website at adviserinfo.sec.gov.

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Investing involves risks and you may incur a profit or a loss. Past performance cannot guarantee future results. This material is provided for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. It is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. There is no assurance the any investment, financial or estate planning strategy will be successful.

Corporate & Institutional

Collective Investment Trusts and Good Governance Considerations

February 3, 2022

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Plan sponsors and other fiduciaries responsible for 401(k) plan investment menu construction, including their advisors, are demonstrating growing interest in adopting collective investment trusts (CITs) as plan investment options. With the level of interest from plan fiduciaries in CITs accelerating, CIT governance practices, and the policies and procedures banks and trust companies use to govern their CIT offerings, are emerging as factors that may warrant consideration by plan fiduciaries when making plan investment option decisions.

What should plan sponsors and financial advisors know about CIT governance?

Know your fiduciary responsibility. Those who are responsible for 401(k) plan investment menu construction are ERISA fiduciaries and owe strict duties of prudence and loyalty to the plan.
Qualified banks and trust companies that offer CITs are also fiduciaries when managing CIT investments. Plan-level fiduciaries may wish to consider the quality of an institution’s CIT governance practices as part of their prudent evaluation of the institution’s CIT offerings.
CIT governance is shaped by a triad of influences. State and federal banking laws, federal securities laws, and ERISA all inform the requirements of administering and maintaining CITs using prudent oversight.

While there are a number of governance approaches available, the decision on which approach to use partially depends on the facts and circumstances of each financial institution that sponsors a CIT. Whatever the approach to governance, the overriding regulatory directives that some appropriate governance be maintained under each leg of the regulatory triad is clear.

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This material is for educational purposes only and is not intended as an offer, recommendation or solicitation for the sale of any financial product or service or as a determination that any investment strategy is suitable for a specific investor. There is no assurance that any investment strategy will be successful. The information in this material has been obtained from sources believed to be reliable, but its accuracy and completeness are not guaranteed. Opinions, estimates and projections constitute the judgment of Wilmington Trust and are subject to change without notice.

There is no assurance that any investment strategy will be successful. Investing involves risk and you may incur a profit or a loss.

Wilmington Trust, N.A. Collective Investment Funds (WTNA Funds) are bank collective investment funds; they are not mutual funds. Wilmington Trust, N.A. serves as the Trustee of the Wilmington Trust Collective Investment Trust and maintains ultimate fiduciary authority over the management of, and investments made in, the WTNA Funds. The WTNA Funds and units therein are exempt from registration under the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended. Investments in the WTNA Funds are not deposits or obligations of or guaranteed by Wilmington Trust, and are not insured by the FDIC, the Federal Reserve, or any other governmental agency. The WTNA Funds are commingled investment vehicles, and as such, the values of the underlying investments will rise and fall according to market activity; it is possible to lose money by investing in the WTNA Funds. Participation in Collective Investment Trust Funds is limited primarily to qualified retirement plans and certain state or local government plans and is not available to IRAs, health and welfare plans, and certain Keogh plans. Collective Investment Trust Funds may be suitable investments for participants seeking to construct a well-diversified retirement savings program. Investors should consider the investment objectives, risks, charges and expenses of any pooled investment company carefully before investing. The Additional Fund Information and Principal Risk Definitions (PRD) contains this and other information about a Collective Investment Trust Fund and is available at https://www3.wilmingtontrust.com/content/dam/wtb-web/pdfs/2021AddtlFundInformationBooklet.pdf or ask for a copy by contacting Wilmington Trust, N.A. at (866) 427-6885.

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