NAGDCA Endorses Public Service Retirement Fairness Act to Amend IRC Section 403(b) to Expand Investment Options

LEXINGTON, Ky., March 12, 2020 (GLOBE NEWSWIRE) -- The National Association of Government Defined Contribution Administrators (NAGDCA) today announced its support for the bipartisan Public Service Retirement Fairness Act sponsored by Congressman Jimmy Panetta (D-CA), which calls for amendment to current law to permit the use of collective investment trusts (CITs) in 403(b) defined contribution retirement plans. NAGDCA is the premier professional association for plan administrators and services providers of government-sponsored defined contribution retirement plans.

“The National Association of Government Defined Contribution Administrators heartily endorses the bipartisan Public Service Retirement Fairness Act introduced by Congressman Panetta and his fellow cosponsors. Amending IRC Section 403(b) to permit inclusion of CITs enables 403(b) plan sponsors to provide a more robust array of investment options at lower costs, providing the potential for increased retirement asset growth for plan participants—which include the nation’s 10 million teachers—and strengthen their ability to better recruit and retain top talent,” stated NAGDCA Executive Director Matt Petersen.

“CITs are common investment choices in 401(a), 401(k), and 457(b) governmental defined contribution plans. Unfortunately, existing statutory provisions, prohibit the inclusion of these investment options in 403(b) plans. Lack of access to the same breadth of investment structures long available to other types of governmental DC plans is costing 403(b) plan participants potentially thousands of dollars in retirement savings due to higher investment expenses and reduced returns and impeding 403(b) plan sponsors’ ability to build powerful, talent-attracting plans,” Petersen concluded.

The Public Service Retirement Fairness Act calls for amendment of Internal Revenue Code (IRC) Section 403(b) to permit inclusion of collective investment trusts (CITs) as investment vehicles in 403(b) retirement plans. It is a companion to Section 117—403(b) Investment Expansion—of the Retirement Security and Savings Act (S. 1431) introduced by Senators Rob Portman (R-OH) and Ben Cardin (D-MD) in May 2019. Congressman Panetta is joined in sponsorship of the SERVICE Careers Act by Representatives Ron Estes (R-KS), Brendan Boyle (D-PA), Darin LaHood (R-IL), Madeleine Dean (D-PA), and Andy Barr (R-KY) will be referred to both the Committee on Ways and Means and House Committee on Financial Services.

In addition to allowing the inclusion of CITs in 403(b) plans, the Public Service Retirement Fairness Act, consonant with S. 1431, Section 117, calls for corresponding changes to the Investment Company Act of 1940, the Securities Act of 1933, and the Securities Exchange Act of 1934, and adjustment to related rules and regulations that apply to CITs and separate accounts (such as exemptions from commodity pool status under CFTC rules and regulations), and regulations which otherwise restrict the types of investments for CITs, such as the so-called QIB rules.

NAGDCA has been advocating for the expansion of allowable investment vehicles in 403(b) retirement plans in support of plan sponsors and participants since 2018.

NAGDCA provides education, information, and training in all aspects of public plan administration to support members in creating plans that enable secure retirement outcomes for their participants. To encourage a grassroots movement for societal change around retirement, NAGDCA conceived and introduced National Retirement Security Week to Congress. Resolution for the creation of National Retirement Security Week was passed by the Senate in 2006 and continues with bipartisan support annually. To learn more about NAGDCA, visit

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