Congress Takes Steps to Enhance Retirement Savings for Middle Class Americans

On February 7, 2025, Eric J. Pan, the President and CEO of the Investment Company Institute (ICI), made a significant announcement regarding the reintroduction of the Retirement Fairness for Charities and Educational Institutions Act of 2025. This legislation aims to broaden retirement savings access for millions of Americans by allowing 403(b) plans to invest in collective investment trusts (CITs).

Significance of the Legislation

The 403(b) plans are vital components of the U.S. retirement system, currently managing about $1.4 trillion in assets. They are particularly popular among employees in educational institutions, charitable organizations, and public service sectors. The proposed legislative change will enable participants in these plans to enjoy the same investment products that are available in 401(k) plans, enhancing their savings potential and financial security.

In his statement, Eric J. Pan expressed gratitude to the dedicated members of Congress who showed bipartisan support for this critical initiative. He highlighted the importance of professionally managed investment products like CITs in helping Americans secure their financial futures. Pan emphasized, "The Retirement Fairness for Charities and Educational Institutions Act of 2025 will enable us to fortify the investment opportunities available to 403(b) plan participants, thus creating a more inclusive retirement system."

Bipartisan Leadership

The reintroduction of this legislation received widespread support from numerous congressional members, including Senators Katie Britt (R-AL), Raphael Warnock (D-GA), Bill Cassidy (R-LA), and Gary Peters (D-MI). In the House of Representatives, championing representatives include Frank Lucas (OK-03), Bill Foster (IL-11), Andy Barr (KY-06), and Josh Gottheimer (NJ-05). Their commitment is crucial in moving this initiative forward and ensuring the financial well-being of retirement savers.

Current Landscape of 403(b) Plans

Approximately 10.2 million individuals are currently participating in 403(b) plans, a figure that doesn’t even encompass all public-sector employees, such as teachers and university staff. This statistic underscores the extensive reach and importance of these retirement plans. Recognizing this, ICI is advocating for the swift passage of this initiative, enforcing the idea that all workers, regardless of their employment sector, should have equitable access to comprehensive retirement savings options.

Conclusion

The Retirement Fairness for Charities and Educational Institutions Act of 2025 represents an important step toward improving financial security for the middle class in the United States. As Congress considers this legislation, the focus remains on ensuring that public sector and nonprofit employees can benefit from a broader range of retirement savings products, aligning their opportunities with those of corporate employees. The hope is to see swift action taken in Congress to help bolster retirement savings across all sectors, enabling a stable financial future for countless Americans.