A group of bipartisan senators introduced a bill that would allow 403(b) plans to invest in collective investment trusts, or CITs.
“Through the Retirement Fairness for Charities and Educational Institutions Act, Americans in the nonprofit sector would be able to access the same investment options available to those in the private sector,” said Sen. Katie Britt, R-Ala., in an August 1 news release announcing the bill. “It levels the playing field so that more hardworking Americans can access retirement sooner.”
The legislation — introduced by Britt and Sens. Raphael Warnock, D-Ga., Bill Cassidy, R-La., and Gary Peters, D-Mich. — specifically focuses on 403(b) plans, which are offered by public schools, churches and other nonprofit organizations. The bill would amend the federal securities laws, as CITs are pooled investment vehicles offered by a bank or trust company, and governed by the Office of the Comptroller of the Currency and state banking regulators.
“This bipartisan bill will help ensure more workers can retire with dignity,” Warnock said in the news release.
“With Social Security going insolvent in nine years, American workers need every tool available to make retirement easier, not harder,” Cassidy contended in the news release.
Social Security’s trust fund for retirees and their families is set to face depletion in 2033, at which point the fund’s income would only be able to pay 79% of its scheduled benefits, according to the Social Security Board of Trustees’ annual report, released in May.
The Senate bill follows a similar amendment that passed out of the House in March, via the Expanding Access to Capital Act of 2023. Though the overarching bill passed in a party-line vote with no support from Democrats, the retirement-related amendments — including the one allowing for 403(b) plans to invest in CITs — received bipartisan support.
