Retirement Fairness for Charities and Educational Institutions Act of 2025
Retirement Fairness for Charities and Educational Institutions Act of 2025 would modify federal securities laws to expand and streamline how 403(b) plans are treated. The bill aims to reduce regulatory burdens by broadening which 403(b)-type arrangements are considered outside the definition of an investment company under the Investment Company Act of 1940, and by aligning treatment across the Securities Act of 1933 and the Securities Exchange Act of 1934. Critically, it would allow a wider range of 403(b) plans operated by charities, educational institutions, and related entities (including church plans and bank-affiliated collective trusts) to operate with fiduciary oversight and pre-approval of investment options, without triggering certain securities registrations or exemptions. This could increase plan flexibility and reduce compliance costs for sponsors, while shifting more investment option governance to plan fiduciaries.
Key Points
- 1Expands not-an-investment-company status to 403(b) plan-related entities and accounts, including employee trusts, custodial accounts (403(b)(7)), governmental plans, bank collective trusts, and separate accounts tied to 403(b) plans, subject to specific eligibility criteria.
- 2Adds a pre-approval requirement: for many 403(b) arrangements, the employer or fiduciary must review and approve each investment option before it is offered to participants, tying fiduciary oversight to the exemption from registration.
- 3Applies across three major securities laws (Investment Company Act of 1940, Securities Act of 1933, and Securities Exchange Act of 1934), ensuring consistent treatment and exemption across registration regimes for qualifying 403(b) plans.
- 4Explicitly includes government plans and church plans as eligible under the expanded framework, and, in certain cases, requires an employer or fiduciary to serve as a fiduciary with respect to investment selection.
- 5Includes conforming amendments to align references in related provisions (e.g., a change to Section 12(g)(2)(H)) to reflect the expanded categories of plans and investments.