The National Association of Christian Lawmakers approved a resolution calling on Congress, the Securities and Exchange Commission, and the White House to remove remaining barriers preventing 403(b) retirement plans from offering investments structured using collective investment trusts, adding momentum to an increasingly broad coalition pushing to expand access to the lower-cost investment vehicles.
The action marks the latest development in a multi-year campaign by retirement industry groups, nonprofit advocates and plan sponsors seeking to eliminate what they argue is an outdated regulatory distinction that leaves 403(b) participants with fewer investment options and, in many cases, higher investment costs.
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For example, a group of nonprofits wrote to Congress in December 2025 to urge the bills’ passage, and the Investment Company Institute has frequently contacted legislators about the bill.
“Our faith-based workers, nonprofit employees and educators should not be disadvantaged simply because of where they work,” the resolution from the Christian lawmakers’ group stated, arguing that increased access to CITs would improve retirement security while promoting fairness across employer-sponsored retirement plans.
The Legislative Path
The SECURE 2.0 Act of 2022 authorized custodial 403(b) plans to invest in CITs under the tax code, but left securities law restrictions unresolved. The House of Representatives in December 2025 approved a package that included a measure making the securities law changes needed to fully implement those provisions.
In order for the House-approved change to become law, the Senate would have to pass the Incentivizing New Ventures and Economic Strength Through Capital Formation (INVEST) Act. Getting legislative attention on this matter before November’s midterm elections could prove difficult, however, as primary season is well underway, and there are only 30 to 35 legislative days remaining in the Senate before the elections, according to the Senate’s tentative 2026 legislative schedule.
Further complicating the bill’s prospects is that other provisions in the act have less bipartisan support than the CIT measure.
For instance, the INVEST Act would provide broader private market access to retail investors, which Democrats oppose.
“As Trump tries to enrich private equity by sticking its risky assets in Americans’ retirement accounts, House Republicans are doing his dirty work in Congress by pushing through a sweeping package filled with giveaways to private equity billionaires and venture capitalists at the expense of Main Street investors,” Senator Elizbeth Warren, D-Massachusetts, said in a December 2025 statement before the House voted on the bill. “This bill should not pass the House. Democrats and Republicans in the Senate should work on a package that will actually strengthen capital formation by making our markets more transparent and fair for small businesses and Americans trying to save for retirement.”
Representative Maxine Waters, D-California, the top Democrat on the House Committee on Financial Services, did not support the legislation. She voted no in the House vote on the INVEST Act.
Broad Support
Though the larger bill remains tied up in the Senate, the provision that would permit CITs to be used in 403(b) plans continues to receive support.
Proponents argue that allowing CITs in 403(b) plans would put nonprofit employers on more equal footing with private sector plans. Unlike mutual funds, CITs are bank-maintained investment vehicles overseen by banking regulators. They generally carry lower administrative and operating costs than mutual funds, which, as securities, are regulated by the SEC.
A recent study by the Vanguard Group found that, for plans it administers, average mutual fund fees are more than double the fees paid by investors using CITs: 16 basis points, compared with 7 bps for CITs. Among the largest retirement plans—those with at least $4 billion in assets—the fee gap grows to 11 bps.
According to the NACL, approximately 14.5 million Americans rely on 403(b) retirement plans.
