To amend the Federal securities laws to enhance 403(b) plans, and for other purposes.
Summary
What This Bill Does
The Retirement Fairness for Charities and Educational Institutions Act amends section 3(c)(11) of the Investment Company Act of 1940 to enhance 403(b) plans. It updates the investment-company exclusion for retirement trusts and collective trust funds maintained by banks so those funds can consist of assets from tax-qualified stock bonus, pension, or profit-sharing trusts; 403(b)(7) custodial accounts; governmental plans; church plans or excluded church-plan accounts; and plans meeting Internal Revenue Code section 403(b) requirements. The exclusion applies when the plans are subject to the relevant federal securities-law, tax-code, ERISA, or withdrawal-restriction conditions. The practical effect is to make collective investment trust access more available for 403(b) plans used by charities, educational institutions, churches, and governmental employers.
Who Benefits and How
Employees of charities and educational institutions benefit if their 403(b) plans gain access to collective investment trusts with potentially lower costs or broader investment options. 403(b) plan sponsors benefit from parity with 401(k)-style collective trust access. Banks maintaining collective trust funds benefit from a larger potential retirement-plan market. Church plans and governmental plans benefit from clearer inclusion in the collective trust framework. Retirement plan advisers and recordkeepers benefit from clearer securities-law treatment for 403(b) collective trust offerings.
Who Bears the Burden and How
Plan fiduciaries must evaluate whether collective trust options satisfy plan duties, tax rules, and participant interests. Banks maintaining collective trusts must comply with the conditions for the Investment Company Act exclusion. Securities and retirement regulators must oversee the updated exclusion. Existing mutual fund providers serving 403(b) plans may face competition from collective trust funds. Plan administrators must update investment menus, disclosures, and operational processes if they add collective trusts.
Key Provisions
- Amends Investment Company Act section 3(c)(11).
- Provides collective trust fund treatment for 403(b) plan assets.
- Includes tax-qualified pension, profit-sharing, and stock bonus trusts.
- Includes 403(b)(7) custodial accounts, governmental plans, and church plans.
- Conditions the exclusion on securities-law, tax-code, ERISA, or withdrawal-restriction requirements.
- Expands retirement investment options for charities and educational institutions.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Expands Investment Company Act treatment for 403(b) retirement plans by allowing collective trust funds maintained by banks to hold assets of 403(b) plans, governmental plans, church plans, and related tax-qualified retirement arrangements when securities-law, tax-code, ERISA, or withdrawal-restriction conditions are met.
Key Policy Areas
Retirement, Securities, Nonprofits
Primary Purpose
Expands Investment Company Act treatment for 403(b) retirement plans by allowing collective trust funds maintained by banks to hold assets of 403(b) plans, governmental plans, church plans, and related tax-qualified retirement arrangements when securities-law, tax-code, ERISA, or withdrawal-restriction conditions are met.
Policy Domains
House resolution provisions
Identified Gains
- Employees of charities
- Employees of educational institutions
- 403(b) plan sponsors
- Banks maintaining collective trust funds
- Church plans
- Governmental plans
Identified Costs
- Plan fiduciaries
- Banks maintaining collective trusts
- Securities regulators
- Retirement regulators
- Mutual fund providers
- Plan administrators
Sponsors
Legislative Progress
ReportedAdditional sponsors: Mr. Meuser, Ms. Pettersen, Mr. Nunn of Iowa, …
Reported with an amendment, committed to the Committee of the …
Mr. Lucas (for himself, Mr. Gottheimer, Mr. Foster, and Mr. …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
403(b) plan sponsors, Employees of charities, Employees of educational institutions
Banks maintaining collective trust funds, Mutual fund providers
Positive-direction: Banks maintaining collective trust funds
Negative-direction: Mutual fund providers
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "irs"
- → Internal Revenue Service
- "sec"
- → Securities and Exchange Commission
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology