The US House of Representatives has passed a bipartisan measure designed to expand retirement investment options for teachers, charity employees and workers in educational institutions, marking a significant step toward modernising long-standing rules governing non-profit retirement plans. The Retirement Fairness for Charities and Educational Institutions Act was included within the broader INVEST Act and secured strong cross-party backing with a vote of 302 to 123.
Legislative Background and Purpose
Introduced by Representatives Frank D. Lucas (R-OK), Josh Gottheimer (D-NJ), Bill Foster (D-IL) and Andy Barr (R-KY), the legislation aims to bring 403(b) retirement plans into closer alignment with other widely used plans such as 401(k) and 457(b). Under current regulations, 403(b) participants are restricted from accessing certain low-cost investment vehicles that have become standard in private-sector plans.
The bill would allow 403(b) plans to invest in collective investment trusts (CITs) and insurance company separate accounts. Supporters argue the modernisation is overdue, noting that the 403(b) framework was established in 1958 and has not evolved sufficiently to reflect contemporary financial markets or workers’ needs.
Lawmakers’ Support and Rationale
Representative Frank D. Lucas said the reform directly addresses long-standing inequities affecting public servants.
“For too long, retirement options have unfairly disadvantaged public servants. Teachers, firefighters, and charity workers in Oklahoma do not enjoy the same access to quality retirement plans as everyone else. That is wrong,” Lucas said. “This bipartisan bill provides the proper consistency across retirement plans and delivers a much needed solution to allow hardworking Americans’ retirement savings to thrive.”
Representative Bill Foster emphasised the importance of parity between non-profit and private sector employees.
“I’m proud to join my colleagues in leading the effort to ensure that nonprofit employees and educators have access to the same low-cost retirement investment options as their private sector counterparts,” Foster said. “By addressing these disparities, this legislation will level the playing field and help provide a secure financial future for those who dedicate their careers to serving others.”
Representative Josh Gottheimer pointed to the financial pressure workers face in high-cost states.
“It’s already way too expensive to retire in New Jersey, and those who work tirelessly to serve our communities shouldn’t be penalized when they do. That’s why I’m proud to help lead the bipartisan Retirement Fairness for Charities and Educational Institutions Act to support our teachers, nurses, and non-profit workers by giving them more power over their pocketbooks,” he said. “I will always fight so Jersey retirees can keep more of their hard earned dollars.”
Representative Andy Barr highlighted the potential for improved investment performance for 403(b) participants.
“It is crucial that we provide employees of nonprofits and educational institutions with the same opportunities for retirement security as those in the private sector,” Barr said. “By allowing 403(b) plan participants access to collective investment trusts, we can enhance their investment options and promote financial stability for those who dedicate their careers to serving others.”
Committee Approval and Next Steps
The legislation advanced through the House Financial Services Committee with a 43–8 vote prior to its inclusion in the INVEST Act. With widespread bipartisan support and strong interest from educational and charitable institutions, advocates say the measure represents an important milestone in efforts to modernise retirement savings structures.
If enacted, the reforms would expand access to more diversified and cost-efficient investment options for millions of non-profit employees, reducing discrepancies that have persisted for decades between 403(b) plans and other retirement vehicles. The legislation now awaits further consideration in the Senate, where its provisions will be evaluated as part of the larger legislative package.
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