WASHINGTON, D.C. — A bipartisan group of U.S. senators has reintroduced legislation aimed at expanding retirement investment options for employees of non-profit organizations. The Retirement Fairness for Charities and Educational Institutions Act, sponsored by Senators Katie Britt (R-Ala.), Raphael Warnock (D-Ga.), Dr. Bill Cassidy (R-La.), and Gary Peters (D-Mich.), seeks to provide 403(b) retirement plan participants with access to the same investment options available to private-sector employees.
403(b) plans are tax-advantaged retirement savings plans used by employees of non-profits, including public universities, hospitals, churches, and charities. Unlike 401(k) plans, which allow investments in collective investment trusts (CITs), 403(b) plans are currently restricted from using this investment vehicle. CITs are tax-exempt pooled investment funds that often provide greater flexibility and lower costs than traditional mutual funds.
Senator Britt emphasized the importance of creating equal retirement opportunities for all workers. “Our legislation would allow Americans in the non-profit sector to access the same investment options available to those in the private sector,” Britt said. “This commonsense bipartisan bill would help Americans who work for non-profits, including many of our hospitals, achieve long-term financial stability.”
Senator Warnock echoed this sentiment, stating that non-profit workers should have access to the same financial tools as private-sector employees. “America’s retirees deserve the peace of mind that comes with financial security when they transition into retirement,” Warnock said. “That’s why I’m proud to help lead this bipartisan legislation which provides equal opportunity for non-profit employees and helps ensure they can retire with dignity.”
Senator Cassidy noted concerns about the long-term sustainability of Social Security and the need for additional retirement savings options. “Social Security is going insolvent. We need to give Americans every tool to help make their retirement more secure,” he said.
Senator Peters highlighted the wide-ranging impact of non-profit employees and their need for strong retirement options. “This legislation would put those using a 403(b) plan on a level playing field with other retirement plan participants by allowing them to invest in collective investment trusts, giving them an equal opportunity to achieve their financial goals,” he said.
The bill has garnered support from various organizations, including the Alabama Association of Nonprofits, American Retirement Association, American Bankers Association, March of Dimes, United Way, Vanguard, and the National Council of Nonprofits.
Brian Graff, CEO of the American Retirement Association, noted that the legislation could benefit 15 million non-profit employees by offering them lower-cost investment options. “Under the bill, 15 million workers at these organizations throughout the country will now have access in their retirement plan—called a 403(b) plan—to the same lower-cost investments that are available to 401(k) plan participants,” Graff said.
If passed, the Retirement Fairness for Charities and Educational Institutions Act would create parity between 403(b) and 401(k) plans, expanding financial security options for employees in the non-profit sector.
