Bipartisan legislation introduced in the U.S. House of Representatives would ensure certain employees participating in 403(b) retirement plans have the access to cost effective options that participants of other retirement plans such as 401(k) and 457(b) plans have.
The Retirement Fairness for Charities and Educational Institutions Act applies to teachers, charity employees, and other nonprofit sector employees participating in 403(b) retirement plans.
The bill would allow 403(b) plan holders to invest in collective investment trusts and insurance companies separate accounts. The intention is to create parity for 403(b) plans and builds on the Secure 2.0 Act. The act, which is now law, required changes to the tax code but did not stipulate changes to securities law.
U.S. Reps. Andy Barr (R-KY), Bill Foster (D-IL), Josh Gottheimer (D-NJ) and Frank D. Lucas (R-OK) introduced the bill in February. The Financial Services Committee advanced the bill on Tuesday.
“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,” Lucas said. “Today, we took one step closer to making that a reality. Passing this bipartisan bill will allow for consistency across retirement plans and deliver a much needed solution to allow hardworking Americans’ retirement savings to thrive.”