Legislation aimed at enhancing investment options for 403(b) retirement plans was reintroduced in the Senate this week.
Put forward by U.S. Sens. Katie Britt (R-AL), Raphael Warnock (D-GA), Dr. Bill Cassidy (R-LA), and Gary Peters (D-MI) the Retirement Fairness for Charities and Educational Institutions Act would enhance investment options for 403(b) retirements plans that offer employees of non-profit organizations the opportunity to invest in their future.
“The Retirement Fairness for Charities and Educational Institutions Act would level the playing field so more hardworking Americans can access retirement resources that best fit their needs,” Britt said. “Our legislation would allow Americans in the non-profit sector to access the same investment options available to those in the private sector. This commonsense bipartisan bill would help Americans who work for non-profits, including many of our hospitals, achieve long-term financial stability.”
Specifically, the legislation would allow 403(b) plan participants to invest in collective investment trusts (CITs) – tax-exempt investment vehicles that provide a diversified, pooled investment option similar to a mutual fund. Currently, 403(b) plan sponsors are not able to use CITs in their investment plan. The law makers said their legislation would create parity between 403(b) plans and 401(k) plans, and benefit more than 15 million employees at hospitals, universities, charities and other non-profit organizations.
“America’s retirees deserve the peace of mind that comes with financial security when they transition into retirement. This is especially true for non-profit workers who dedicate their lives to serving their communities— they deserve access to the same retirement investment opportunities private sector employees have,” Warnock said.
The legislation is supported by a number of non-profits trade organizations and investment trade organizations like the Alabama Association of Nonprofits, American Bankers Association, American Benefits Council, American Heart Association, American Life Insurance Association, American Retirement Association, Insured Retirement Institute, Investment Company Institute, National Association of Insurance and Financial Advisors, National Council of Nonprofits, Nationwide, Prudential, United Way, and Vanguard.
The Investment Company Institute also supported the legislation.
“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,” ICI CEO and president Eric J. Pan said.