H.R. 3063 would allow 403(b) plans to offer collective investment trusts (CITs) and unregistered insurance contracts as investment options. A 403(b) plan is a tax-favored employer-sponsored retirement plan that may be offered by educational institutions of state and local governments and certain charitable organizations. Like 401(k) and governmental 457(b) plans, such plans may provide for nonelective contributions and matching contributions by employers and pre-tax or after-tax contributions by employees. Under current law, 401(k) and governmental 457(b) plans may offer CITs, which are investments similar to mutual funds but are not subject to the same regulatory requirements, as well as unregistered insurance contracts.
The staff of the Joint Committee on Taxation (JCT) anticipates that the bill would not result in a significant increase in aggregate assets held in tax-advantaged retirement plans rather than taxable accounts. As a result, JCT estimates the bill would lower revenues by an insignificant amount annually.