"Defined Contribution (DC) plans -- primarily 401(k)s and 403(b)s -- now hold over $12 trillion in assets ... Within these plans, Target Date Funds (TDFs) are the default investment option for most participants. Increasingly, TDFs are being housed in Collective Investment Trusts (CITs) rather than SEC-registered mutual funds.... CITs operate in a poorly regulated gray zone.... TDFs held in state-regulated CITs are therefore emerging as one of the most dangerous and least transparent areas in the retirement system." MORE >>
"The deadline by which a plan sponsor must amend its retirement plans depends on the plan type. Here’s a list of the current amendment deadlines by plan type." MORE >>
"In 403(b) plans, employees with at least 15 years of service at eligible employers, such as public schools and certain nonprofits, may qualify for an additional catch-up contribution of up to $3,000 per year, capped at $15,000 total. The Roth catch-up requirement does not apply to these ... Similarly, for governmental 457(b) plans, the Roth requirement applies only to the extent catch-up contributions exceed the regular 457(b) limit." MORE >>
"[If] a worker does not have FICA wages (e.g., a governmental agency employee not covered by a Section 218 Agreement), Section 603 does not apply.... If your plan's service providers cannot confirm they have appropriate systems in place to comply with Section 603's requirements, and you are considering prohibiting catch-up contributions until they do, this would require an advance amendment prior to January 1, 2026. " MORE >>
"A key decision for employers is whether to implement the deemed election process.... A plan may use either of the two new correction methods, but it must apply the same correction method to similarly situated participants.... The deadline to correct a failure using these correction methods depends on which limit is the basis for the redesignating pre-tax deferrals as catch-up contributions.... Special rules apply to dual-qualified plans (plans qualified under both U.S. and Puerto Rico law). " MORE >>
"Final regulations also provide some clarity on the optional 'super' catch-up contributions that were permitted starting on 2025. Plan sponsors have several design and administrative decisions to make before implementing these changes, and plan amendments reflecting these changes are due by December 31, 2026." MORE >>
"[W]ithout a statutory change, 403(b) investments are still limited to annuity contracts and custodial accounts holding mutual fund investments. None of these will support the typical private equity investment. Even should the proposed 403(b) CIT legislation ever pass, it would likely still be insufficient to support private equity investments from being held by most 403(b) plans." MORE >>
"Each employer that sponsors a 403(b) plan which uses a pre-approved plan document must ensure that document is restated to account for changes in law by December 31, 2026. Especially for those nonprofit and public sector organizations characteristically facing resource and staffing constraints, it’s crucial to start the restatement process now." MORE >>
"The suit alleges that the defendants 'based the decision of how to allocate forfeitures solely on the company's own self-interest and failed to consider … the interests of the plan and its participants.' In the past two years, at least 50 class-action 401(k) lawsuits have been filed by plan participants over misuse of forfeited assets from former employees." [Tillery v. WakeMed Health & Hospitals, No. 25-0408 (E.D. N.C. complaint filed Jul. 10, 2025)] MORE >>
"Administrators of 403(b) plans in the Bay State would be subject to heightened disclosure requirements if legislation before both chambers of the Massachusetts legislature is enacted.... It would require companies administering such plans to disclose, for each investment ... [1] fee ratio; [2] returns; [3] net of fees; and [4] amount of compensation sales agents receive." MORE >>
"[A]llowing collective investment trusts (CITs) in 403(b) plans could save the median plan participant about 0.08% to 0.09% annually compared to mutual fund fees -- translating into $23,000-$28,000 less paid in fees by age 65 for someone earning $74,000 a year. That's enough to cover six months of living expenses in retirement for one person." MORE >>
"This list includes pre-approved plans that were submitted to the IRS for opinion letters from May 2, 2022 to May 22, 2025, covering the 2022 Cumulative List. Rev. Proc. 2021-37 changed the pre-approved program so that Prototype and Volume Submitter plans are combined into a single opinion letter program. Additionally, the types of plans are now reflected simply as either standardized or non-standardized pre-approved plans.... Please note that virtually all opinion letters were issued at the same time, November 29, 2024." MORE >>
"The Retirement Fairness for Charities and Educational Institutions Act of 2025 would expand the available investment options, allowing certain Section 403(b) plans to include collective investment trusts among the investment options offered to their participants. If enacted, this legislation will help redress the balance for Section 403(b) plan participants." MORE >>
"Despite the challenges, 403(b) plans have had success with annuities, which could offer plan sponsors of 401(k) plans solace to adopt the products. But research by the U.S. Government Accountability Office, indicated the high cost of annuities in 403(b) plans.... [D]ifferences in the participant base between 403(b) and 401(k) plans make it difficult for the defined contribution space to broadly apply lessons from annuity use in 403(b)s plans." MORE >>
"Because they are limited to institutional investors, CITs are regulated based on the assumption that the investors have the knowledge and bargaining power to safeguard their own interests. As such, CITs are much less regulated than mutual funds. This can be seen as a benefit because of lower cost but also can lead to less favorable legal terms in the areas of transparency, accountability and liquidity when compared with mutual funds." MORE >>
"Unlike the 401(k) retirement plans offered to private sector workers, the 403(b) plans that nonprofit workers use typically cannot access low-cost collective investment trusts (CITs).... Compounded over a 40-year career, the cost gap results in about $23,000-$28,000 less retirement wealth at age 65.... Allowing 403(b) plans to include CITs as fund options will level the playing field for all retirement savers. " MORE >>
"The recently passed so-called Fairness in Benefits Act compels school districts to allow private companies to 'educate' employees about their 401(k), 403(b) and 457(b) products. Tellingly, the law only applies to teachers and state workers participating in the Tennessee Consolidated Retirement System (TCRS)." MORE >>
"You must now have a written program containing all terms and conditions of the plan.... A written program can consist of bundling the salary reduction agreement, summary plan description, custodial account, annuity arrangement and any other plan documents you may already have in place." [Also available: Transcript of employee-oriented podcast: 403(b) Tax-Sheltered Annuity Plans] MORE >>
"Unlike 401(k) plans, where employers and trustees can direct existing investments to be mapped or transferred to replacement funds, 403(b) plans are generally not invested in trusts, but in fixed or variable annuity contracts and/or custodial accounts (mutual funds). Some of these contracts may not permit mapping of investments to replacement investments without obtaining individual consent from participants." MORE >>
"[The Retirement Fairness for Charities and Educational Institutions Act of 2025 {HR 1013)] would amend Federal securities laws to allow 403(b) plans to invest in CITs and unregistered insurance contracts that currently may be invested in by comparable retirement plans, such as 401(k)s.... [T]he committee defeated an amendment offered by Rep. Stephen Lynch (D-Mass.) that would have amended the legislation to require that CITs can only be included in 403(b) plans that are covered by ERISA." MORE >>
"[SECURE] 2.0 mandated, for the very first time, a special automatic enrollment arrangement be added to all new 401(k) and 403(b) plans established on or after the enactment of SECURE 2.0 ... The Proposed Regulations provide important preliminary guidance on how to implement the mandate and what plans are impacted by the new law." MORE >>
"[This letter] was sent to an educator by an Equitable employee. Keep in mind that Equitable is a company that was fined $50 million by the SEC for misrepresenting fees. The educator's crime? They did a presentation for colleagues in which they compared someone in a low-cost target date fund (charging 0.08%; hello Fidelity and Vanguard) with someone in an Equitable Equi-vest Series 201 Target 2055 Allocation investment charging 2.3%." MORE >>
124 pages. "This Information Package contains samples of plan provisions that have been found to satisfy certain specific requirements of the Internal Revenue Code, as amended through the SECURE 2.0 Act of 2022 ... These CODA LRMs are not revised to reflect certain changes to catch-up contribution limits and requirements enacted by SECURE 2.0, to the extent these changes are not included on the Cumulative List. This CODA LRM also does not include plan language for implementing pension-linked emergency savings accounts (PLESAs) ... added by Section 127 of SECURE 2.0." [Rev. Dec. 2024, pub. Mar. 2025. Includes redlined version highlighting changes.] MORE >>
312 pages. "This Information Package contains samples of plan provisions that have been found to satisfy certain specific requirements of the Internal Revenue Code, taking into account changes in the plan qualification requirements, regulations, revenue rulings, and other guidance ... including changes enacted by the [CARES Act] ... the [SECURE] Act of 2019 ... and ... the SECURE 2.0 Act of 2022 ... Such language may or may not be acceptable in different plans depending on the context in which used." [Rev. Dec. 2024, pub. Mar. 2025. Includes redlined version highlighting changes.] MORE >>
"It is not uncommon to find governmental agencies that do not operate a public school system, do not have an IRS determination letter and are not within any other classification of an eligible employer, having operated a Section 403(b) Plan for many years. They have been under the misconception that because they are exempt from federal income taxation as a 'local government,' they are an eligible employer. However, the IRS considers a 403(b) plan maintained by an ineligible employer to have experienced a potentially disqualifying event, which it classifies as an 'Employer Eligibility Failure,' starting from the plan's inception." MORE >>
