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INVEST Act (H.R. 3383): What it means for CITs in 403(b) plans

February 27, 2026 - 3 min

Senior Vice President, Head of Institutional Product and ETFs – Natixis Investment Managers – US Distribution

Collective Investment Trusts (CITs) represent a sizable opportunity for 403(b) retirement plans, yet regulatory limitations have long prevented these plans from accessing the lower-cost, more flexible investment structure widely available in 401(k)s. When the Secure 2.0 legislation was initially passed in 2022, key provisions were omitted that would have enabled 403(b) plans to use CITs. Although discussions continued in subsequent years, progress remained slow and fell short of producing fully enacted legislation.

Against this backdrop, the case for expanding CIT access in 403(b) plans is straightforward. CITs provide meaningful advantages: lower fees relative to mutual funds, broader investment strategy menus, enhanced diversification, faster product creation, flexible plan level customization, and access to institutional vehicles common in 401(k) plans. Why shouldn’t all investors have access to these benefits? Millions of educators, health care workers, nonprofit employees, and other public service professionals stand to benefit if CIT access is fully authorized.

Compared with mutual funds, CITs typically provide broader investment menus, enhanced diversification opportunities, and greater flexibility for plan-level customization. As a result, they are widely used in the 401(k) marketplace.

Why regulatory barriers have persisted

Historically, 403(b) plans have been restricted from using CITs due to limitations in tax law and securities law. The SECURE 2.0 Act of 2022 corrected only part of the issue, amending tax rules but leaving securities laws unchanged. In response, lawmakers introduced bipartisan bills in 2024–2025 aimed at fully permitting CITs in 403(b) plans. Industry groups, including asset managers such as Natixis Investment Managers, strongly supported these efforts.

INVEST Act (H.R. 3383) advances CIT access for 403(b) plans

Momentum increased meaningfully in December 2025 when the House passed the INVEST Act (H.R. 3383), which includes provisions to fully authorize CITs across ERISA governed, governmental, and nonprofit 403(b) plans. The next steps in the legislative process require Senate approval followed by a presidential signature before the changes can be implemented. The initiative has benefitted from bipartisan support, reflecting a broad recognition that 403(b) participants deserve access to the same cost efficient investment vehicles already common in other defined contribution plans.

Retirement policy is an area where we have seen and continue to see bipartisan work in Washington. There is a lot of support for the INVEST Act, with over 300 House members from both sides of the aisle voting in support."

– Kari Grant, Vice President, Government Relations at Natixis

Why expanded CIT eligibility matters

Extending CIT eligibility to 403(b) plans would allow plan sponsors to offer lower-cost and more flexible investment options comparable to those already common in 401(k) plans.

For participants, expanded access to CITs has the potential to improve diversification and long-term retirement outcomes. This is particularly relevant for workers in education, health care, nonprofit, and public-sector roles.

Outlook for CITs in (403)b plans

The ongoing effort to extend CIT eligibility to 403(b) plans reflects a commitment to improve retirement outcomes for workers in education, healthcare, nonprofit, and public sector roles. With House approval secured and Senate action pending, Natixis Investment Managers looks forward to the expansion of CIT usage, representing a significant step toward delivering fairer, more cost effective investment options to millions of Americans.

Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Natixis Investment Managers, or any of its affiliates.

The information provided does not constitute investment advice, and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon.

There can be no assurance that any investment will achieve its stated investment objective. All investing involves risk, including the risk of loss of principal. There are risks associated with equity, fixed income, and alternative investments. Diversification does not guarantee a profit or protect against a loss.

Collective investment trusts (CITs) are pooled investment vehicles that are maintained by a bank or trust company. CITs are generally available only to certain qualified retirement plans and are not publicly traded. CITs are exempt from registration under federal securities laws and exempt from registration under the Investment Company Act of 1940. CITs are subject to federal and state banking regulations. Mutual funds are pooled investment vehicles regulated by the Securities and Exchange Commission (SEC). They are publicly traded and typically offered to both retail and institutional investors. Investments in either a mutual fund or CIT are not insured by the FDIC, and are not deposits, obligations of, or endorsed or guaranteed in any way by any bank.

Natixis Investment Managers’ distribution and service groups include Natixis Distribution, LLC.

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