Legislators this week reintroduced two bills that would green light the usage of collective investment trusts (CITs) in 403(b) plans.
Presented as the Retirement Fairness for Charities and Education Institutions Act of 2025, the bills were reintroduced in the House as H.R. 1013 and in the Senate as S. 424 on Wednesday.
Representative Frank Lucas (R-OK) sponsored the bill in the House, while Representatives Josh Gottheimer (D-NJ), Bill Foster (D-Illinois), and Andy Bar (R-KY), served as co-sponsors.
Sen. Katie Britt (R-AL) sponsored S. 424, as well as co-sponsors Sens. Gary Peters (D-MI), Bill Cassidy (R-LA), and Raphel Warnock (D-GA).
The bill initially passed the House last March and was introduced in the Senate later in August, but was not acted on by the time Congress recessed at the end of the year.
The Retirement Fairness for Charities and Educational Institutions Act amends federal securities law to expand usage of CITs and unregistered insurance company separate accounts to 403(b) plans. The bill would expand usage of CITs to federal and public workers, including 15 million teachers, hospital workers, and non-profit employees.
“Retirement savers participating in other employer-sponsored retirement plans, such as 401(k) plans, have access to cost-effective collective investment trusts (CITs) and unregistered insurance company separate accounts,” said Paul Richman, Insured Retirement Institute (IRI) chief government and political affairs officer, in support of the bill. “The changes proposed in the bill will allow 403(b) plan providers increased flexibility to build more robust investment lineups for plan participants consisting of lower cost options that preserve principal and provide protected guaranteed lifetime income solutions.”
Currently, only 401(k) plans, 457(b) plans, and the federal government’s Thrift Savings Plan (TSP), among other plans, are authorized to include CITs in their investment lineups under registration exemptions included in the Investment Company Act of 1940, the Securities Act of 1933, and the Securities Exchange Act of 1934. While 403(b)s are now utilized as retirement plans, they are not exempted because they previously only offered retail products that were sold directly to participants.
However, legislation in the past years has made amends to open CIT usage in 403(b) plans. The SECURE 2.0 Act amended Internal Revenue Code Section 403(b) to authorize use of CITs in 403(b)s with custodial accounts. Still, those who offer 403(b) plans and want to invest in CITs will have to wait until securities laws are changed.
The bills have garnered widespread support in the past from industry organizations, including the American Retirement Association and the Investment Company Institute (ICI).
Following the news this week, the ICI issued its own statement.
“ICI thanks these dedicated members of Congress for their bipartisan leadership on this important legislation and continuing the fight for retirement savers in the 119th Congress,” said ICI CEO and President Eric J. Pan. “These professionally managed products help millions of Americans secure their financial future. ICI hopes Congress will move swiftly to pass this legislation so public sector and nonprofit employees participating in 403(b) plans can benefit from the same retirement savings products offered in 401(k)s.”
SEE ALSO:
IRI Reveals Top Retirement Legislation Priorities for 2025
CITs in 403(b)s Bill Headed to Senate
CITs in 403(b)s Saga Adds More Twists and Turns
Bipartisan Bill to Allow CITs in 403(b)s Introduced in Senate
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
