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Senator presses for 403(b) parity after tax fix left securities-law barrier
Summary
Senators and witnesses urged completing a technical securities-law fix so collective investment trusts (CITs) available under SECURE 2.0 can be used in 403(b) and similar plans, arguing this would lower fees for teachers, nurses and nonprofit workers.
Sen. Bridal pressed the panel on an unfinished technical change after the tax-code reforms in SECURE 2.0. Witnesses agreed: the tax fix removed a barrier but two securities-law exemptions still prevent many CITs from serving 403(b) plans. "The Secure 2.0 fixed the tax barrier, but as you noted, it did not fix two securities law barriers," Dahlia Blass told the committee, explaining statutory sections of the Investment Company Act and Securities Act would need amendment to allow parity with 401(k) plans.
Panelists said parity could expand low-cost investment options for nonprofit and public-school employees without forcing any employer to offer a CIT. Sen. Bridal argued the change is simple, widely used in practice and would lower fees for many public servants.
