HOUSE APPROVES TWO IRI PRIORITY ISSUES

403(b) Retirement Plan Parity and E-Delivery Legislation Head to Senate

 WASHINGTON, D.C. – The U.S. House of Representatives passed two bills in the Insured Retirement Institute’s (IRI) 2024 Retirement Security Blueprint. Both measures were approved as amendments to the Expanding Access to Capital Act (HR 2799), which passed the House today.

One amendment would establish parity for 403(b) retirement plans serving teachers, hospital workers, clergy, and non-profit employees. The second directs the U.S. Securities Exchange Commission (SEC) to write a rule permitting the electronic delivery of regulatory-required documents to investors.

The 403(b) plan measure, the Retirement Fairness for Charities and Educational Institutions Act of 2023, HR 3063, provides plan participants access to the same cost-efficient investment options already available to all other employer-sponsored retirement plan participants.

The bill amends federal securities law to authorize the use of collective investment trusts (CITs) and unregistered insurance company separate accounts within 403(b) retirement savings plans.

“Retirement savers participating in other employer-sponsored retirement plans, such as 401(k) plans, have access to cost-effective collective investment trusts (CITs) and unregistered insurance company separate accounts,” said Wayne Chopus, President and CEO at IRI. “The proposed changes in the legislation will allow 403(b) plan providers increased flexibility to build more robust investment lineups for plan participants consisting of lower-cost options that preserve principal and provide protected guaranteed lifetime income solutions.”

The e-Delivery measure, the Improving Disclosure for Investors Act, would require the SEC to include a mechanism to allow participants to opt out of electronic delivery and receive paper documents. The change provided in the bill is necessary as the SEC rescinded the substantial applicability of its Rule 30e-3, which had previously allowed for the electronic delivery of certain shareholder reports.

“IRI supports the use of electronic means as the default mechanism for document delivery,” Chopus said. While individual investors should have the option to request paper delivery, in the modern world, paper should be the exception, not the rule.”

Electronic delivery is safer and more effective than traditional paper delivery. Using electronic delivery to communicate with investors also creates opportunities for the industry to provide dynamic, real-time information rather than static data. Through a layered disclosure approach, consumers can more easily navigate electronic information and find the level of detail they prefer.

With the approved amendments, the Expanding Access to Capital Act now moves to the Senate for consideration.

“IRI will focus our efforts on encouraging the Senate to quickly consider and pass these IRI-advocated measures,” Chopus said.

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Contact: Dan Zielinski