[Updated: On Friday morning, the House passed H.R. 2799, Expanding Access to Capital Act of 2023, the larger bill that included the CITs in 403(b)s amendment, on a party line vote of 212 - 205. The bill will now go to the Senate. A quote from ARA CEO Brian Graff is added below.]
On March 7, the House of Representatives voted on an amendment to a larger bill that would allow collective investment trusts (CIT) to be included as menu options in 403(b)s.
The vote on The Retirement Fairness for Charities and Educational Institutions Act, the third of five amendments to H.R. 2799, Expanding Access to Capital Act of 2023, passed by a wide margin, 301 to 125, including 87 Democrats.
A security sweep in preparation for President Biden’s State of the Union address prevented a vote on the larger bill, which passed on March 8.
"There are over 15 million 403(b) plan participants that would benefit from gaining access to CIT investments in their plans," American Retirement Association CEO Brian Graff said in a statement. "We will continue pushing Congress hard to get this done."
Earlier in the week, Reps. Josh Gottheimer, D-N.J., Bill Foster D-Ill. and Frank Lucas, R-Okla., sent a “Dear Colleague” notice to members late Tuesday, asking them to vote to support the amendment.
“Today, there is no rational basis why CITs are not available in 403(b) plans and accessible to teachers, hospital workers, charity and non-profit employees,” the notice read.
It argued that collective investment trusts in 401(k) and 401(a) plans have grown dramatically in recent years.
Currently, 403(b) plan participants do not have the same access to the variety of investment options that are available to savers using other plans, including 401(k) plans, 457(b) plans, and the federal Thrift Savings Plan. If passed, the representatives said it would ensure that 403(b) plan participants have the same opportunities to invest as other retirement plan participants.
Unlike mutual funds or ETFs—which must register with the Securities and Exchange Commission (SEC)—CITs are regulated under the Office of the Comptroller of the Currency (OCC), a federal banking agency in the U.S. Treasury Department and state banking regulators.
Since CITs are exempt from SEC registration requirements, they typically have lower fees than mutual funds. CITs, which are not retail products, also typically have lower administration, marketing, and distribution costs than retail products like mutual funds.
The “rule” for debating H.R. 2799, along with the amendment list, can be FOUND HERE. The 403(b) amendment is listed as No. 3 in order.
- Log in to post comments