18th District Congressman Darin LaHood is co-sponsoring re-introduced legislation to allow for broader investment in public sector employment retirement programs.
The bipartisan Public Service Retirement Fairness Act would allow public sector employees like teachers, nonprofit employees, and public servants to have access to diversified investments in their 403(b) defined-contribution retirement-savings plans. 403(b) plans are similar to 401(k) plans offered in the private sector, but they cannot invest in Collective Investment Trusts.
The new law would allow public sector employee retirement programs to invest in the CITs, which typically have lower fees and more flexibility than the types of annuity contracts and mutual funds that the 403(b) plans are limited to investing in by law. Due to compound interest and higher fees, it can allegedly cost public servants thousands of dollars in retirement savings.
LaHood says the legislation fixes the law by allowing for investment in the CITs, and it gives public employees similar access to investments with lower costs like those who work in the private sector. The National Association of Government Defined Contribution Administrators has endorsed the bill.
The bill was introduced on March 12th last year, but died without a vote on the floor in the previously seated Congress. The bill now heads back to the committee process.