House, Senate introduce bills to allow collective investment trusts in 403(b)s, as trade groups lobby

Representative Frank Lucas, a Republican from Oklahoma. Photo: Al Drago/Bloomberg

Last week, Representatives Frank Lucas (R-OK), Josh Gottheimer (D-NJ), Bill Foster (D-IL), and Andy Barr (R-KY) introduced the Retirement Fairness for Charities and Educational Institutions Act of 2025 in the House of Representatives, which would allow 403(b) plans to include collective investment trusts (CITs) as part of their investment menu options. The bill, which was also reintroduced in the Senate last week, is another attempt to pass the CIT legislation after Congress was unable to enact previous versions of this bill.

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.