I 

117TH CONGRESS 

1ST SESSION H. R. 2741 

To modify rules relating to 403(b) plans. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 21, 2021 

Mr. PANETTA (for himself, Mr. ESTES, Mr. BRENDAN F. BOYLE of Pennsylvania, Mr. LAHOOD, Ms. DEAN, and Mr. BARR) introduced the following 

bill; which was referred to the Committee on Financial Services, and in 

addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To modify rules relating to 403(b) plans. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Public Service Retire5 ment Fairness Act of 2021’’. 

6 SEC. 2. ENHANCEMENT OF 403(b) PLANS. 

7 (a) PERMITTED INVESTMENTS.— 

8 (1) IN GENERAL.—Section 403(b)(7)(A)(i) of 

9 the Internal Revenue Code of 1986 is amended to 

10 read as follows: 


kjohnson on DSK79L0C42PROD with BILLS
2 

•HR 2741 IH

1 ‘‘(i) the amounts to be held in that 

2 custodial account are invested in regulated 

3 investment company stock or a group trust 

4 intended to satisfy the requirements of In5 ternal Revenue Service Revenue Ruling 

6 81–100 (or any successor guidance), and’’. 

7 (2) CONFORMING AMENDMENT.—Section 

8 403(b)(7) of such Code is amended by striking ‘‘FOR

9 REGULATED INVESTMENT COMPANY STOCK’’. 

10 (3) EFFECTIVE DATE.—The amendments made 

11 by this subsection shall apply to amounts invested 

12 after December 31, 2020. 

13 (b) AMENDMENTS TO THE INVESTMENT COMPANY

14 ACT OF 1940.—Section 3(c)(11) of the Investment Com15 pany Act of 1940 (15 U.S.C. 80a–3(c)(11)) is amended 

16 to read as follows: 

17 ‘‘(11) Any— 

18 ‘‘(A) employee’s stock bonus, pension, or 

19 profit-sharing trust which meets the require20 ments for qualification under section 401 of the 

21 Internal Revenue Code of 1986; 

22 ‘‘(B) custodial account meeting the re23 quirements of section 403(b)(7) of such Code; 

24 ‘‘(C) governmental plan described in sec25 tion 3(a)(2)(C) of the Securities Act of 1933; 


kjohnson on DSK79L0C42PROD with BILLS
3 

•HR 2741 IH

1 ‘‘(D) collective trust fund maintained by a 

2 bank consisting solely of assets of one or more 

3 of such trusts, government plans, or church 

4 plans, companies or accounts that are excluded 

5 from the definition of an investment company 

6 under paragraph (14) of this subsection; 

7 ‘‘(E) plan which meets the requirements of 

8 section 403(b) of the Internal Revenue Code of 

9 1986 if— 

10 ‘‘(i) such plan is subject to title I of 

11 the Employee Retirement Income Security 

12 Act of 1974 (29 U.S.C. 1001 et seq.); 

13 ‘‘(ii) any employer making such plan 

14 available agrees to serve as a fiduciary for 

15 the plan with respect to the selection of the 

16 plan’s investments among which partici17 pants can choose; or 

18 ‘‘(iii) such plan is a governmental 

19 plan (as defined in section 414(d) of such 

20 Code); or 

21 ‘‘(F) separate account the assets of which 

22 are derived solely from— 

23 ‘‘(i) contributions under pension or 

24 profit-sharing plans which meet the re25 quirements of section 401 of the Internal 


kjohnson on DSK79L0C42PROD with BILLS
4 

•HR 2741 IH

1 Revenue Code of 1986 or the requirements 

2 for deduction of the employer’s contribu3 tion under section 404(a)(2) of such Code; 

4 ‘‘(ii) contributions under govern5 mental plans in connection with which in6 terests, participations, or securities are ex7 empted from the registration provisions of 

8 section 5 of the Securities Act of 1933 by 

9 section 3(a)(2)(C) of such Act; 

10 ‘‘(iii) advances made by an insurance 

11 company in connection with the operation 

12 of such separate account; and 

13 ‘‘(iv) contributions to a plan described 

14 in subparagraph (E).’’. 

15 (c) AMENDMENTS TO THE SECURITIES ACT OF

16 1933.—Section 3(a)(2) of the Securities Act of 1933 (15 

17 U.S.C. 77c(a)(2)) is amended— 

18 (1) by striking ‘‘or (D)’’ and inserting ‘‘(D) a 

19 plan which meets the requirements of section 403(b) 

20 of such Code if (i) such plan is subject to title I of 

21 the Employee Retirement Income Security Act of 

22 1974 (29 U.S.C. 1001 et seq.), (ii) any employer 

23 making such plan available agrees to serve as a fidu24 ciary for the plan with respect to the selection of the 

25 plan’s investments among which participants can 


kjohnson on DSK79L0C42PROD with BILLS
5 

•HR 2741 IH

1 choose, or (iii) such plan is a governmental plan (as 

2 defined in section 414(d) of such Code); or (E)’’; 

3 (2) by striking ‘‘(C), or (D)’’ and inserting 

4 ‘‘(C), (D), or (E)’’; and 

5 (3) by striking ‘‘(iii) which is a plan funded’’ 

6 and inserting ‘‘(iii) in the case of a plan not de7 scribed in subparagraph (D), which is a plan fund8 ed’’. 

9 (d) AMENDMENTS TO THE SECURITIES EXCHANGE

10 ACT OF 1934.—Section 3(a)(12)(C) of the Securities Ex11 change Act of 1934 (15 U.S.C. 78c(a)(12)(C)) is amend12 ed— 

13 (1) by striking ‘‘or (iv)’’ and inserting ‘‘(iv) a 

14 plan which meets the requirements of section 403(b) 

15 of such Code if (I) such plan is subject to title I of 

16 the Employee Retirement Income Security Act of 

17 1974 (29 U.S.C. 1001 et seq.), (II) any employer 

18 making such plan available agrees to serve as a fidu19 ciary for the plan with respect to the selection of the 

20 plan’s investments among which participants can 

21 choose, or (III) such plan is a governmental plan (as 

22 defined in section 414(d) of such Code), or (v)’’; 

23 (2) by striking ‘‘(ii), or (iii)’’ and inserting 

24 ‘‘(ii), (iii), or (iv)’’; and 


kjohnson on DSK79L0C42PROD with BILLS
6 

•HR 2741 IH

1 (3) by striking ‘‘(II) is a plan funded’’ and in2 serting ‘‘(II) in the case of a plan not described in 

3 clause (iv), is a plan funded’’. 

Æ 


kjohnson on DSK79L0C42PROD with BILLS