403(b) Bill Would Open $1.6 Trillion Market to Cheaper Funds

Americans held approximately $1.6 trillion in 403(b) retirement plans as of June 2026, yet federal securities law still blocks those savers from investment options that 401(k) participants routinely use. That is the disparity H.R. 1013, the Retirement Fairness for Charities and Educational Institutions Act of 2025, now before the U.S. House of Representatives, aims to close.

The U.S. Chamber of Commerce strongly supports the bill and urges its passage, according to a letter to House members signed by Mike Flood, the Chamber's Senior Vice President for Capital Markets Competitiveness. The bill would allow eligible 403(b) plans to invest in collective investment trusts and insurance company separate accounts — vehicles widely available through 401(k) plans but restricted for 403(b)s under outdated federal securities laws.

Who does the bill affect?

Millions of teachers, healthcare workers, and nonprofit employees rely on 403(b) plans to save for retirement. The $1.6 trillion figure comes from the Investment Company Institute's Quarterly Retirement Market Data for the second quarter of 2026, published September 17, 2026. The Chamber's argument is simple: where Americans work should not limit their opportunities to build long-term retirement security.

"Teachers, nurses, and nonprofit employees deserve access to the same range of retirement investment options available to other American workers, subject to appropriate plan-level oversight," the letter states.

For HR leaders at schools, hospitals, and nonprofits, the bill touches fiduciary and plan-design decisions. Broader access to collective investment trusts would give 403(b) plan sponsors new options for diversification and cost management, while oversight obligations would remain at the plan level.

How large are the potential savings?

The cost gap between the two vehicles is concrete. Actively managed collective investment trusts carried an average asset-weighted expense ratio of 23.9 basis points, compared with 60.1 basis points for actively managed mutual funds, according to 2022 data cited by the Chamber from Morningstar's 2025 Retirement Plan Landscape Report, published in April 2025.

That is a difference of roughly 36 basis points. Compounded over a career, the Chamber argues, expanding access to these vehicles would give plan sponsors additional opportunities to manage costs and strengthen participants' retirement savings over time.

What is the bill's legislative path?

The reform is not new. A bipartisan measure, the INVEST Act, included this provision and passed the House in December 2025 by a vote of 302–123. H.R. 1013 advances the same policy as a standalone bill, and the Chamber frames that as a chance to build on bipartisan momentum and deliver benefits for retirement savers without controversy.

The Chamber respectfully urged the House to pass H.R. 1013 and encouraged timely Senate consideration. The letter did not specify a floor date, and no Senate companion timeline appears in the source material.

Why does this matter now?

The bill arrives as 403(b) assets continue to grow and as plan sponsors face mounting pressure to demonstrate value in retirement offerings. If enacted, HR and benefits teams at charities and educational institutions would need to evaluate whether collective investment trusts and separate accounts fit their lineups, and how plan-level oversight would handle the expanded menu.

The 302–123 House vote on the earlier measure suggests the policy already commands broad support in that chamber. Senate timing remains the open question for the millions of savers holding $1.6 trillion in 403(b) balances.