By Tom Joyce | Center Square Contributor
(meaningful news) – Faith leaders and conservative groups want the Securities and Exchange Commission (SEC) to change retirement rules they say harm nonprofit and church workers.
SEC Chairman Paul S. In a letter sent to Atkins on Tuesday, the coalition requested that the agency allow 403(b) plans to invest in collective investment trusts, or CITs. Private sector 401(k) plans already use those funds, but most 403(b) plans cannot.
The group says the gap puts millions of people at a disadvantage.
“Our faith-based and nonprofit churches, organizations and affiliates are among the 14.5 million Americans who are struggling with underfunding retirement savings,” the letter said.
Employees at nonprofits, churches, and public schools rely on 403(b) plans. Those plans mostly limit investments to annuities and mutual funds.
The coalition says the ban increases costs.
“While mutual funds offer this capability, their management fees are more than double those of most CITs, draining precious dollars from the top of our retirement savings and reducing our returns on investment,” the letter says.
Lower fees can make a big difference over time.
The letter states, “According to one study, just a 0.08% annual fee savings from access to CIT could offset up to $28,000 in retirement savings for 403(b) plan participants by age 65.”
The coalition says broader access will boost savings across the country.
“In other words, if CITs were allowed in all 403(b) plans, nonprofit workers could see an additional $525 million to $590 million in retirement savings each year,” the letter says.
CITs already play a major role in the private sector. They account for 38% of all 401(k) assets, the letter said.
The group says the current rules make no sense.
“Denying people access to CIT for any reason other than the field in which they work unfairly sacrifices our returns in the name of complex technology,” the letter said.
Congress has moved forward in this direction. Lawmakers passed the SECURE 2.0 Act in 2022, which removed tax barriers to the use of CITs in 403(b) plans. The INVEST Act passed the House this session and awaits Senate action.
The alliance also mentioned the public support.
“A recent national survey found that nearly two-thirds of registered voters believe all retirement plans should provide access to the same investment options regardless of employer type,” the letter said.
The survey he cited came from BlackRock.
Signers of the letter include former lawmakers as well as leaders of the American Center for Law and Justice, Faith Vince and CatholicVote. Notable lawmakers include former U.S. Senator Rick Santorum, R-Pennsylvania, and former U.S. Representative Randy Hultgren, R-Illinois.
They want the SEC to act now.
“We need you to act decisively to provide fairness, flexibility, and financial security to American workers,” the letter said.
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