by Tennessee State Rep. Lee Reeves
Tennessee’s pension system is one of the best-funded in the nation, and that is no accident. Every session, my colleagues and I on the Finance, Ways, and Means Committee make hard choices, keep our commitments, and make sure the numbers pencil out because the people depending on Tennessee’s retirement system spent decades earning those benefits and deserve to know they’ll be there.
Our discipline has paid off. In fiscal year 2025, the K-12 teachers’ pension plans were funded at approximately 106%. We’ve made a secure retirement a top priority, and we need Washington to do the same.
U.S. Senator Bill Hagerty has been a champion for Tennesseans’ financial security. In the last Congress, he co-sponsored the Empowering Main Street in America Act, a sweeping capital markets reform bill. More recently, he joined Senator Ruben Gallego to reintroduce the Financial Exploitation Prevention Act, bipartisan legislation to give financial institutions better tools to protect seniors from scams and fraud that drain billions in hard-earned retirement savings every year. Yet for all that progress, one glaring gap remains, falling hardest on the very workers we should do the most to protect.
Under current federal securities law, nearly 14.5 million teachers, nurses, hospital workers, and nonprofit employees who save for retirement through 403(b) plans cannot access collective investment trusts (CITs). These are the same pooled, professionally managed investment vehicles that have become the dominant choice in private-sector retirement plans. Like in a mutual fund, investors pool their money to buy a mix of stock and bonds. However, because CITs are not subject to the same SEC registration and retail distribution costs as mutual funds, the fee difference causes the typical nonprofit worker to miss out on almost $30,000 in retirement wealth across a 40-year career.
This matters because 403(b) savers are already navigating a steeper climb: as of late 2025, the typical 403(b) account balance trailed its 401(k) counterpart by more than $13,000. The workers in these plans are not less disciplined or less deserving. They are operating under a system that has not given them the same tools.
If you work at a private company with a 401(k), CITs are almost certainly on your investment menu. The Thrift Savings Plan, the retirement account for federal employees and members of Congress themselves, already uses CITs. The argument that Tennessee’s teachers need to be shielded from a well-established, professionally managed investment vehicle that Congress itself benefits from does not hold up to scrutiny.
Thankfully, Senator Hagerty has continued pushing to close this gap in the current Congress, supporting the Retirement Fairness for Charities and Educational Institutions Act, legislation that would amend federal securities law to put 403(b) plans on an equal footing with 401(k) plans. The House has already passed legislation containing this reform with broad bipartisan support. The Senate should finish the job.
But Tennessee workers should not have to wait indefinitely on the Senate calendar. The Securities and Exchange Commission has existing exemptive authority granted by Congress, and it should use that authority to provide appropriate relief for 403(b) plans while maintaining the investor protections these workers deserve. Doing so could give millions of teachers, nurses, hospital employees, and nonprofit workers access to the same well-established, professionally managed investment vehicles already available in many private-sector retirement plans.
Congress should still make the change permanent in federal law. But when an outdated regulatory barrier is costing workers real money over the course of their careers, Washington should not allow process to become an excuse for inaction.
In Tennessee, we do not have the luxury of leaving known problems unaddressed. The teachers staffing our classrooms, the nurses caring for our families, and the nonprofit workers strengthening our communities chose careers of service knowing the pay would not always match the private sector. The least Washington can do is ensure an outdated technicality in securities law does not unnecessarily cost them tens of thousands of dollars in retirement savings.
Congress should act. And until it does, the SEC should use the authority it already has.
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Lee Reeves serves in the Tennessee House of Representatives for District 65, representing part of Williamson County.
