The U.S. Capitol in Washington.
House lawmakers on March 8 passed a bill that included three retirement-related amendments that industry groups say will help American workers.
The broader bill — the Expanding Access to Capital Act of 2023 — passed in a 212-205 party line vote with no support from Democrats. On March 7, lawmakers approved adding the retirement-related amendments to the bill, each of which garnered bipartisan support.
The amendments include the Retirement Fairness for Charities and Educational Institutions Act of 2023, which permits 403(b) plan to invest in collective investment trusts.
While SECURE 2.0, a comprehensive retirement security package Congress passed in December 2022, included a measure that changed the tax code with respect to CITs and 403(b) plans, lawmakers couldn't agree on changing sections of securities laws that would have allowed 403(b) plans to offer CITs, which are already available to other types of defined contribution plans and some 403(b) church plans. The security laws need to be changed via legislation because CITs are bank products offered by a bank or trust company and governed by the Office of the Comptroller of the Currency and state banking regulators. CITs are considered unregistered securities.
Another amendment — The Improving Disclosure for Investors Act of 2024 — directs the Securities and Exchange Commission to make electronic delivery the primary way for investors to receive information, though provides an option for investors to receive paper documents.
Fidelity Investments, an e-delivery supporter, welcomed the amendment's passage.
"We have long believed, and data has shown, that e-delivery is a more secure, accessible and less wasteful way to effectively communicate with investors of all ages," the firm said in a statement.
Lastly, an amendment — The Increasing Investor Opportunities Act — was included. It will allow a closed-end fund to invest its assets more freely in securities issued by private funds.
The Investment Company Institute, which supports the amendment, also noted that it "removes the loophole now allowing activist investors to take over funds to force closed-end funds into liquidity events or radically change their investment strategy."
ICI President and CEO Eric Pan said in a statement that "deep-pocketed activists, often operating through hedge funds, currently are able to amass (force closed-end funds) shares at below-net asset value prices, then use their newfound voting power to spur corporate actions that harm long-term shareholders — liquidating the CEF, forcing the CEF to repurchase its shares at inopportune times, or converting the CEF to an open-end fund, just to name a few."
The broader bill will now head to the Senate.
