Bipartisan Bill Would Allow CITs in 403(b) Plans
On February 5, 2025, Rep. Frank Lucas (R-OK-3) re-introduced H.R. 1013 to the House of Representatives. The House Committee on Financial Services is now reviewing the bill.
1. Expanded Investment Options
The bill broadens the types of assets in which CITs can invest, thereby providing retirement plans—especially those governed under 403(b) rules—with access to a wider range of investment strategies. This change is intended to enhance portfolio diversification and potentially improve returns for plan participants.
2. Clarified Regulatory Framework
Provisions in the bill clarify the roles and responsibilities of fiduciaries with respect to CITs. It outlines more precise disclosure and oversight requirements to ensure that participants receive transparent information about fees, performance, and any conflicts of interest associated with CIT investments.
3. Streamlined Administration
The legislation includes measures designed to simplify the administrative processes related to CITs. By reducing regulatory ambiguities, it aims to lower administrative burdens on plan sponsors and fiduciaries, making it easier to manage CIT investments while maintaining robust participant protections.
4. Enhanced Investor Protections
With updated oversight provisions, the bill seeks to ensure that CITs adhere to higher standards of prudence and accountability. This includes improved mechanisms for monitoring performance and costs, which are intended to better safeguard the retirement savings of plan participants.
These provisions collectively work to modernize the use of CITs in retirement plans by increasing flexibility for investment choices, clarifying fiduciary responsibilities, and enhancing transparency and oversight. If you have any questions or need assistance navigating these new regulations, please don’t hesitate to contact us.
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