Witnesses Urge Senate Banking Panel to Pass 403(b) CIT Access Bill

Witnesses at a Senate Banking Committee hearing on capital formation urged Congress to pass legislation allowing 403(b) plans to invest in collective investment trusts ("CITs") and several voiced support for the DOL's proposed Investment Selection Rule.

The August 6, 2026, hearing, titled "Empowering Main Street by Unlocking Access to Capital," focused on expanding retail access to alternative investments. The witnesses addressed two primary proposals:

• 403(b) CIT access. Dalia Blass (Senior Investment Management Partner, Sullivan & Cromwell), Kenneth Bentsen (President and CEO, SIFMA), and Mike Flood (Senior Vice President, U.S. Chamber of Commerce) testified in favor of the Retirement Fairness for Charities and Educational Institutions Act (S. 424), which would let 403(b) plans invest in CITs, as 401(k) plans already can. Testifying solely in her personal capacity, Ms. Blass stated that a "quirk of language" in federal securities law creates the disparity, while Mr. Bentsen and Mr. Flood called for parity between the two plan types (see prior coverage). Senator Tim Scott, committee Chair, noted that 13 committee members have co-sponsored the bill.

• DOL Investment Selection Rule. Ms. Blass said the proposal would give ERISA fiduciaries a pathway to a legal presumption that their investment-selection process satisfies the duty of prudence under ERISA Section 404 ("Fiduciary duties"), calling it "a great step towards restoring retail access to alternative investments." Mr. Flood said the rule would help with "democratizing" access to alternative investments for 401(k) savers. Mr. Bentsen did not address the DOL proposal in his written testimony but argued more broadly for expanded retail access to private markets, citing SEC Commissioner Mark Uyeda's remarks on balancing private and public capital markets.

Cantrell Dumas (Senior Researcher, Joint Center for Political and Economic Studies) cautioned against adding private-market investments and digital assets to defined-contribution plans, citing less-standardized disclosure, difficult-to-verify valuations, layered fees, and illiquidity. He warned that workers may mistake plan-menu inclusion for a vetted endorsement.