Faith leaders urge SEC to expand retirement options for nonprofit workers

The group says that the gap puts millions at a disadvantage.

“Our faith-based and nonprofit churches, organizations, and allies are among the 14.5 million Americans stuck with the short straw when it comes to retirement saving,” the letter says.

Workers at nonprofits, churches, and public schools rely on 403(b) plans. Those plans mostly limit investments to annuities and mutual funds.

The coalition says the restriction increases costs.

“While mutual funds offer this capability, their management fees are more than double most CITs, skimming precious dollars off the top of our retirement savings and shrinking our return on investment,” the letter says.

Lower fees can make a major difference over time.

“According to one study, just a 0.08% annual fee savings from access to CITs could recoup as much as $28,000 in retirement savings by age 65 for 403(b) plan participants,” the letter says.

The coalition says broader access would boost savings nationwide.

“Put differently, if CITs were allowed in all 403(b) plans, nonprofit workers could see an additional $525 million to $590 million in retirement savings each year,” the letter says.

CITs already play a major role in the private sector. The letter says they account for 38% of all 401(k) assets.

The group says the current rules make little sense.

“Denying access to CITs, for no reason other than the sector in which individuals work in, unfairly sacrifices our returns in the name of a head-scratching technicality,” the letter says.

Congress has already moved in this direction. Lawmakers passed the SECURE 2.0 Act in 2022, which removed tax barriers to CIT use in 403(b) plans. The INVEST Act has passed the House this session and awaits Senate action.

The coalition also pointed to public support.

“A recent national survey found nearly two-thirds of registered voters believe all retirement plans should provide access to the same investment options regardless of employer type,” the letter says.

The survey they cited came from BlackRock.

Signers of the letter include leaders from the American Center for Law and Justice, Faith Wins, and CatholicVote, along with former lawmakers. Notable lawmakers included former U.S. Sen. Rick Santorum, R-Pennsylvania, and former U.S. Rep. Randy Hultgren, R-Illinois.

They want the SEC to act now.

“We ask that you act decisively to deliver the fairness, flexibility, and financial security American workers deserve,” the letter says.