Rep. Lucas Urges Colleagues to Support 403(b) Legislation

Washington, DC - Today, Representative Frank D. Lucas (OK-03), a member of the House Financial Services Committee and Chairman of the House Financial Services Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity, delivered remarks on the House floor urging his colleagues to support his Retirement Fairness for Charities and Educational Institutions Act, legislation that would allow public servants to have access to the same financial tools as private sector employees when planning for retirement.

Remarks as prepared for delivery:

I rise today in strong support of my bill, H.R. 1013, the Retirement Fairness for Charities and Educational Institutions Act.

This bipartisan legislation will allow our communities' public servants, such as teachers, nurses, doctors, university professors, and employees of nonprofit organizations, to have the same financial tools available as the private sector when planning for their retirement.

For many of these public servants, their retirement savings are through a 403(b) plan. However, those public servants' 403(b) plans are unable to invest in the same cost-effective investment products that are available to all other plans, like 401(k) plans.

Under current law, 403(b) plans generally cannot access the same collective investment trusts and insurance company separate accounts available to 401(k) plans.

Collective investment trusts allow retirement plans to pool their investments, providing access to institutional investment strategies at lower costs than many traditional mutual funds.

Similarly, insurance company separate accounts provide another avenue for retirement plans to access professionally managed investments, generally with lower administrative expenses.

The advantage is that these options can be less expensive to operate, leaving more of the investment's return in the worker's account.

Over the course of someone's career, even small reductions in investment fees can translate into thousands of additional dollars in retirement savings.

Consider two Americans saving for retirement. One works for a private company and saves through a 401(k). The other works for a public school or nonprofit and saves through a 403(b).

Both are putting away their hard-earned money for retirement. But because of outdated restrictions, the worker with a 403(b) does not have access to some of the same lower-cost investment options.

This may seem like a small difference, but consider a public servant saving ten thousand dollars a year over a forty-year career.

Assuming a six percent annual return, paying just five basis points more in annual investment fees could cost that worker more than nineteen thousand dollars in retirement savings.

That's a significant amount of money for someone who has spent their career serving their community.

Our public servants deserve better.

My legislation would give these workers access to the same investment options available to millions of other Americans.

This bill would not only provide a level playing field for workers, regardless of the type of retirement plan their employer sponsors, but would also allow our nonprofit institutions like hospitals, public schools, and charities to compete with the private sector for talent through their retirement plan offerings.

The effort to finally provide parity in retirement options for our public servants is a bipartisan one spanning several Congresses.

I am grateful to my colleagues on both sides of the aisle who have worked hard to ensure that those who serve our communities have equal access to save for retirement.

In the 117th Congress, the Ways and Means Committee unanimously passed this measure under former Chairman Neal's leadership.

While only the tax code was ultimately fixed for 403(b) plans that year, it was a much-needed first step in correcting this disparity. That vote was nearly unanimous - 414-5.

I introduced this bill in the 118th Congress to finish the work that the Ways and Means Committee began and to correct the underlying securities laws.

In 2023, the Financial Services Committee favorably reported this bill for floor consideration with 35 yeas, and when I offered the measure as an amendment to a broader bill on the floor, it received overwhelming support of over 300 members.

This Congress's Financial Services Committee again favorably reported this legislation with 43 yeas.

And just last December, the House once again passed this legislation as part of the INVEST Act, which received the support of over 300 members.

For several Congresses, this legislation has received bipartisan support in both committee and on the House floor. It is time we finish the work and ensure that teachers, nonprofit employees, and other public servants have access to the same retirement investment options as private-sector workers.

I urge my colleagues to support this bill so that the Americans who serve our communities can finally have the same retirement investment opportunities as every other worker.

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