Senator Tim Scott (R-SC)
Many retirement industry leaders are in favor of a new bill introduced by the Senate Banking, Housing and Urban Affairs Committee that will allow 403(b) plans to invest using collective investment trusts (CITs), which typically have cost-effective fee structures.
CITs are tax-exempt, pooled investment vehicles similar to mutual funds that are maintained by a bank or trust company exclusively for qualified plans, including 401(k)s and certain types of government plans. CITs and mutual funds account for 47% of all target-date strategy assets as of year-end 2022, according to Morningstar, which predicts CITs are on pace to overtake mutual funds as the most popular target-date vehicle in the next two years.
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