The American Bankers Association today expressed its support for bipartisan legislation to “level the playing field” among retirement plans by expressly authorizing 403(b) plans — which are offered by public schools, hospitals and certain charities — to invest in bank collective investment trusts, or CITs.
The Retirement Fairness for Charities and Education Institutions Act has been introduced in the House (H.R. 1013) and Senate (S. 424). In letters to the bill’s sponsors, (House/Senate) ABA noted that bank CITs are regulated under federal and state banking laws and subject to examination and oversight by federal and state banking regulators. They must comply with federal tax laws that limit the eligible investors to U.S. tax-qualified retirement plans and U.S. governmental retirement plans, and must meet specific bank management standards, follow investor eligibility restrictions and are subject to the broad anti-fraud requirements.
“Given the significant benefits of CITs for retirement investing, we believe that CITs should be made available without restriction to 403(b) plans in the same manner as traditional pension and 401(k) plans,” ABA said.
