This bill amends federal securities laws to make it easier for 403(b) retirement plans, commonly used by teachers, nonprofit workers, and employees of religious and charitable organizations, to offer collective investment trusts as investment options, similar to what is already allowed for 401(k) plans. Currently, 403(b) plans are largely restricted to annuities and mutual funds, which can come with higher fees, while 401(k) plans can use lower-cost collective trust funds. The legislation updates the Investment Company Act, Securities Act, and Securities Exchange Act to extend certain securities law exemptions to 403(b) plans, provided the plan is subject to ERISA protections, is a governmental plan, or the employer agrees to act as a fiduciary and reviews investment options before they're offered to workers. This change primarily affects public school employees, university staff, hospital workers, and employees of churches and other tax-exempt organizations who participate in 403(b) retirement savings plans. The bill does not include new federal funding but aims to give these workers access to potentially lower-cost investment options, bringing their retirement plans closer to parity with private-sector 401(k) plans.
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