Retirement Fairness for Charities and Educational Institutions Act of 2025
Workers at public schools, charities, and non-profit organizations would be able to invest their 403(b) retirement savings in collective investment trusts, which are pooled bank funds that typically charge lower fees than retail mutual funds. Federal securities rules currently allow corporate 401(k) plans to use these funds while largely barring non-profit plans. The bill opens these investment options to 403(b) accounts as long as the employer or a plan manager accepts legal responsibility for vetting and selecting the funds offered to staff.
What this bill touches.
Who it helps · who it burdens.
Who it helps
- 403(b) retirement plan sponsors and participantsSec. 2(a)–(c) allows 403(b) retirement plans (typically offered by public educational institutions, charities, and churches) to invest in bank collective trust funds and insurance separate accounts under exemptions from federal investment company regulation and securities registration.
- Banks and insurance companies offering pooled investment vehiclesSec. 2(a)–(c) expands their market by allowing them to accept assets from qualifying 403(b) retirement plans into their collective trust funds and separate accounts without losing federal exemptions from investment company regulation, securities registration, and reporting rules.
The provisions, in plain language.
Allows 403(b) retirement plans—such as those for public school, charity, and church employees—to invest in bank collective trust funds and insurance company separate accounts by exempting those funds from regulation as investment companies under federal law, provided certain fiduciary or investment review conditions are met.
Exempts interests or participation in collective trust funds and insurance separate accounts offered to qualifying 403(b) retirement plans from federal securities registration requirements under the Securities Act of 1933.
Exempts interests in collective trust funds and insurance separate accounts holding qualifying 403(b) retirement plan assets from registration and reporting requirements under the Securities Exchange Act of 1934.