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Should collective investment trusts be allowed in 403(b)s? The saga continues

There’s a push by Congress to pass a bill to allow CITs – tax-exempt, pooled investment vehicles similar to mutual funds – in 403(b) plans, but investor advocacy groups oppose the bill. But now, the American Retirement Association is strongly advocating for its passage.

By Lynn Cavanaugh | November 22, 2024 at 10:34 AM
U.S. Capitol building in Washington, D.C.. Photo: Diego M. Radzinschi/ALM

In September, there was a push by Congress, spearheaded by ranking Senate Banking, Housing and Urban Affairs Committee member Sen. Tim Scott (R-SC), to include the ability for 403(b) plans to use the low-cost collective investment trusts (CITs) investment options that many 401(k) plans use today.

Shortly after, six investor advocacy groups opposed CITs in 403(b)s because some plans are not governed by ERISA, so eliminating SEC’s regulatory oversight is detrimental, in a letter sent to the Senate committee on November 13.

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