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Congressman Again Pushes for Expanding Investment Options in 403(b)s
A lack of access to the same investment types allowed in other DC plans means 403(b) plan participants are missing out on increased retirement savings, industry sources say.
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Congressman Jimmy Panetta, D-California, has re-introduced the Public Service Retirement Fairness Act, a bill that would allow collective investment trusts (CITs) as investment options in 403(b) plans.
The bill was first introduced last March and was referred to the House Committee on Financial Services and the House Committee on Ways and Means, but nothing has come of it since.
CITs are collectively managed investment vehicles that typically have lower costs and more flexibility than annuity contracts and mutual funds the only types of investments allowed in 403(b) plans. With excessive fee lawsuits extending to the 403(b) space and account assets growing larger with time, 403(b) plan sponsors have been inquiring about offering
Public Sector Gen X Workers Face More Outstanding Retirement Plan Loans
Likely feeling the same financial squeeze as their private sector counterparts, the new Public Retirement Research Lab also found they are contributing less to retirement savings.
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Public sector Generation X workers have taken more retirement plan loans than any other age group, according to a recent survey by the Public Retirement Research Lab (PRRL) that measured data in public sector defined contribution (DC) plans.
The survey, which was made in collaboration with the Employee Benefit Research Institute (EBRI) and the National Association of Government Defined Contribution Administrators (NAGDCA), was discussed during a webinar hosted by the PRRL. Jack VanDerhei, research director at EBRI, said the organizations reviewed plans based on age, tenure and plan type, which included 213 457(b), 401(a), 403(b), 401(k) and other public DC plans of state, county, city and subdivision government employees
Does Senate Hearing Foreshadow More Retirement Reform?
Commenters at a Senate Finance Committee hearing held Wednesday sure hoped so and they had a lot of ambitious ideas.
The U.S. Senate Finance Committee hosted a lengthy hearing Wednesday on the state of the nation’s retirement planning system, with the specified goal of “investigating challenges to Americans’ retirement security.”
Following opening statements from Senators Rob Portman, R-Ohio, and Sherrod Brown, D-Ohio, in which the lawmakers voiced optimism about the potential for achieving retirement reform in 2021, the main part of the hearing included comments from four well-known retirement industry thought leaders. They were Scott Barr, a financial adviser with Edward Jones; Eric Stevenson, president, retirement plans, Nationwide; Michael P. Kreps, principal, Groom Law Group; and Joshua Luskin, president, National Association of Government Defined Contribution Administrators (NAGDCA).
NAGDCA Expects Movement on Retirement Reform in 2021
Priorities of the National Association of Government Defined Contribution Administrators is in recently introduced legislation, including allowing 403(b) plans to invest in CITs.
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During a webinar sponsored by the National Association of Government Defined Contribution Administrators (NAGDCA) on Wednesday, Paul Beddoe, head of U.S. government affairs at NAGDCA, said, “Retirement reform is bipartisan and right front and center.” He said the Retirement Security and Savings Act, proposed by Senators Rob Portman, R-Ohio, and Ben Cardin, D-Maryland, “should and will eventually be passed.”
Reagan Anderson, senior vice president, government affairs at Capital Group, said, “The thing to highlight is that Portman’s commitment to a bipartisan bill is genuine and important,” but that the margins between the Democrats and the Republicans in both the House of Representatives and the Senate “are so slim, it will be