HR 1013: Retirement Fairness for Charities and Educational Institutions Act of 2025

HR 1013 in plain English: This bill allows 403(b) retirement plans, which cover employees of public schools, charities, and churches, to invest in collective investment trusts and insurance company separate accounts. These are pooled investment options currently available to other types of retirement plans but not to 403(b) plans.

Stated purpose

To allow 403(b) retirement plans—used by employees of public schools, charities, and churches—to invest in collective investment trusts and insurance company separate accounts, the same pooled investment options already available to other employer retirement plans.

Key points

• Expands 403(b) plan investment options to include collective investment trusts, pooled assets held by banks or trust companies.
• Allows 403(b) plans to invest in insurance company separate accounts.
• Affects retirement plans used by public school employees, charity workers, and church employees.

Arguments supporters make

• Workers at schools, charities, and churches deserve the same low-cost investment choices—like collective investment trusts—that employees at private companies already have access to through 401(k) plans.
• Collective investment trusts often carry lower fees than retail mutual funds, so allowing 403(b) plans to use them could mean more retirement savings stay in workers' pockets over time.
• This levels the playing field between different types of retirement accounts and removes an outdated legal distinction that has put nonprofit and school employees at a disadvantage.

Arguments opponents make

• Collective investment trusts have less regulatory oversight and disclosure requirements than mutual funds, so expanding access to them could reduce transparency and consumer protections for workers in these plans.
• The bill adds new fiduciary review requirements for employers, which could be burdensome for small nonprofits or churches that lack the administrative resources to properly evaluate investment options.
• Broader investment options do not automatically benefit workers if employers or plan administrators choose products that serve institutional interests rather than participants' retirement security.

Tradeoffs

Giving 403(b) participants access to potentially lower-cost investment pools may come at the cost of reduced regulatory transparency, since collective investment trusts face fewer disclosure rules than standard mutual funds. The benefit of investment parity with 401(k) plans must be weighed against the added compliance responsibilities placed on employers, particularly smaller organizations.

Current status in Congress: Passed House.

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