Expand investment options for employees with a 403(b) retirement plan?
H.R. 1013 is a bipartisan bill that would expand investment options available for employees participating in 403(b) retirement plans, which are often offered by public schools, nonprofit organizations, and churches. The bill would amend federal securities laws to allow employees with such plans to participate in bank-maintained collective trust funds and insurance company separate accounts, expanding the investment options available to them. The legislation aims to provide employees of public schools, charities, and other eligible organizations with greater flexibility in managing their retirement savings and improved access to investment opportunities comparable to those available through 401(k) plans.
Sponsor: Rep. Frank D. Lucas (Republican, Oklahoma, District 3)
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Opponents say
• "Section 202 (or H.R. 1013) expands the availability of complicated and risky financial products to underregulated 403(b) retirement plans used by millions of teachers, nonprofit workers, and others… With the inclusion of these three provisions, consumer advocacy groups warn that the legislation is a step in the direction of more deregulation in capital markets, particularly opaque private markets, where smaller investors are at a disadvantage compared to well-positioned insiders." Source: The Congressional Progressive Caucus
• "H.R. 1013, the Retirement Fairness for Charities and Educational Institutions Act, allows certain plans (known as 403(b) retirement plans that generally apply to teachers, nurses, etc.) to invest in unregistered insurance contracts and collective investment trusts (CITs). We believe investors in these plans shouldn’t be exposed to such lightly overseen products; plenty of safe investment alternatives abound. We oppose this bill." Source: Public Citizen
Proponents say
• "For too long, retirement options have unfairly disadvantaged public servants. While the required changes to our tax code for 403(b) plans have already been made, we now need to implement the necessary changes to securities law. This bipartisan bill aims to do exactly that and will allow for much needed consistency across retirement plans. Hardworking Americans deserve solutions like this to see their retirement savings thrive." Source: Rep. Frank D. Lucas (Republican, Oklahoma, District 3), Sponsor of H.R. 1013
• "I’m proud to join my colleagues in leading the effort to ensure that nonprofit employees and educators have access to the same low-cost retirement investment options as their private sector counterparts. By addressing these disparities, this legislation will level the playing field and help provide a secure financial future for those who dedicate their careers to serving others." Source: Rep. Bill Foster (Democrat, Illinois, District 11), Cosponsor of H.R. 1013
• "This bipartisan legislation would level the playing field among retirement plans by expressly authorizing 403(b) plans to invest in bank collective investment trusts (CITs or collective funds). These bank-maintained trusts collectively invest the assets of multiple qualified tax-exempt retirement plans through either passively managed (indexed) or actively managed plans… Retirement plan sponsors and their record keepers are increasingly choosing to invest through these customized investment options due to the fact that CITs are cost effective and offer more investment options for 401(k) and similar defined contribution plans." Source: Kirsten Sutton, Executive Vice President for Legislative Affairs in the American Bankers Association
