Overview

• Amends Investment Company Act of 1940, Securities Act of 1933, and Securities Exchange Act of 1934 to expand 403(b) plan investment options
• Targets retirement plans used by schools, charities, and government agencies
• Reported out of House Financial Services Committee on November 28, 2025, with bipartisan support (25 cosponsors)

Who does this affect?

• Main groups: Teachers, nonprofit employees, government workers who participate in 403(b) retirement plans; employers offering these plans (schools, charities, public agencies)
• Who benefits: Plan participants gain access to more investment options (collective trust funds) previously available only to 401(k) plans; employers get simplified compliance
• Teen impact score: 5/10 (indirect impact via family retirement security and future employment benefits)

What This Bill Does

• Amends 15 U.S.C. 80a-3(c)(11) to exempt 403(b) plans from Investment Company Act registration if: (1) plan is subject to ERISA Title I, (2) employer serves as fiduciary for investment selection, or (3) plan is governmental and employer reviews/approves each investment option before offering to participants
• Modifies 15 U.S.C. 77c(a)(2) to exempt 403(b) plans from Securities Act registration under same three conditions, adding new subparagraph (D) for these plans
• Changes 15 U.S.C. 78c(a)(12)(C) to exempt 403(b) plans from Securities Exchange Act broker-dealer requirements when meeting fiduciary or governmental plan standards
• Allows collective trust funds maintained by banks to include 403(b) plan assets alongside 401(k) and governmental plan assets
• Requires governmental 403(b) plans to have employer, fiduciary, or designated person review and approve each investment alternative prior to offering to participants

Legislative Status

• Introduced February 5, 2025, by Rep. Lucas (R-OK) with bipartisan original cosponsors
• Reported favorably by House Financial Services Committee November 28, 2025 (Report 119-390)
• Placed on Union Calendar 340, committed to Committee of the Whole House

In short

• Gives 403(b) retirement plans (used by teachers and nonprofit workers) the same investment flexibility as 401(k) plans.
• Removes securities law barriers that currently limit investment options for schools, charities, and government employers.
• Requires employers or fiduciaries to review investment choices, ensuring oversight while expanding options.
• Allows collective trust funds to pool 403(b) assets with other retirement plans, potentially reducing costs.
• Bipartisan bill with 25 House cosponsors awaits full House vote.

Why should I care?

If your parent works as a teacher, nurse at a nonprofit hospital, or government employee, this bill affects their retirement savings. Right now, 403(b) plans face more restrictions than 401(k) plans, limiting investment choices and potentially increasing costs. This bill levels the playing field by allowing access to collective investment funds that can offer lower fees and more diversification. Better retirement savings for parents means more family financial security. For teens planning careers in education, healthcare, or public service, this improves the retirement benefits you'll receive in those fields. The bill also matters for understanding how federal securities laws shape everyday financial products—regulations written decades ago now need updates to reflect modern retirement planning.