Anew national survey released late August found that 80% of Americans believe the country faces a retirement crisis, up from 67% just six years ago. More than 6 in 10 Americans are concerned they will not achieve financial security in retirement and 85% say policymakers should make retirement security a higher national priority.
As someone who has spent more than 40 years in the financial services industry helping clients build and protect wealth, I share that concern, and I can tell you that the crisis isn't just about how much people save. It's about how much of what they save quietly disappears before they ever see it.
Nowhere is this problem more stubborn or preventable, than in the 403(b) plans coveringnearly 300,000 Tennesseans working in schools,
hospitals, universities, nonprofits and charities.
The hidden cost of an outdated retirement rule
Throughout my career, I've watched Williamson County teachers and Nashville corporate workers earn identical salaries, contribute the same amount each month, and retire with dramatically different balances. The culprit isn't investment skill; it's their treatment under securities law.
Historically, corporate employees have benefited from access to collective investment trusts, lower-cost, institutionally managed investment pools standard in corporate workers’ 401(k) plans. Up until very recently, federal securities law has blocked the nurses, teachers, ministers and charity workers saving with similar 403(b) plans from accessing CITs entirely.
This technicality has a steep hidden cost. Actively managed CITs run more than60% cheaper than comparable mutual funds. That spread, held constant over a 30-year career, makes a significant impact in the overall balance of someone’s retirement account. In real dollars, analysts estimate 403(b) savers forgoup to $28,000 in lost retirement savings, and a simple fix could increase nonprofit workers’ annual retirement wealth byas much as $590 million nationwide.
Why teachers and nurses face a different system
The irony is that Tennessee’s public servants and nonprofit employees aren’t the people with multiple income streams or deep investment portfolios. We’re talking about nurses, social workers, university faculty, community health workers and public school teachers who stretch every dollar and save what they can. A 403(b) is all many of them have, and for too long, those plans weren't designed with savers' interests in mind.
Opponents sometimes raise concerns about investor protections. In the 401(k) context, CITs are evaluated, selected and monitored by plan fiduciaries under ERISA, who are legally required to act prudently and solely in the interests of participants and beneficiaries. Extending the same protections and investment options to 403(b) participants doesn't weaken oversight; it extends fairness.
Congress started the fix. Regulators can finish it.
Congress has been working to fix this for years.SECURE 2.0 in 2022 removed the tax-code barrier to CITs in 403(b) plans but left the securities law barrier standing. The House passed theINVEST Act in December 2025, which included provisions to level the playing field for 403(b) savers, but the corresponding Senate bill, theRetirement Fairness for Charities and Educational Institutions Act, has stalled in the upper chamber.
Crucially, the SEC doesn’t have to run out the legislative clock. The Commission has exemptive authority it could deploy today to allow 403(b)s to invest in CITs and change the investment landscape overnight. This intervention checks all the SEC’s boxes: it serves the public interest, protects investors and does not undermine government oversight.
U.S. Sen. Bill Hagerty also deserves credit in this effort. Hagerty was an early cosponsor of the Senate effort to unlock CITs for 403(b) plans, and he understood before it became fashionable to notice that our teachers, nurses and nonprofit workers have been treated as second-class savers. That instinct was right, and his position on the Senate Banking Committee gives him real leverage to make sure SEC Chair Paul S. Atkins gets the message.
Tennessee workers deserve retirement fairness
Tennessee has an enormous stake in getting this right. There are more than 64,000 public school teachers in our state. Tennessee's nonprofit sector employs roughly 400,000 people. Our teachers and nonprofit workers have earned a fair deal in retirement, and it’s time for Washington to deliver.
Tim Pagliara is founder, chairman and chief investment officer of CapWealth, an independent SEC-registered investment adviser and multifamily office based in Franklin, Tennessee, with more than $2 billion in assets under management.
This article originally appeared on Nashville Tennessean: Tenn. teachers lose retirement savings to hidden 403(b) fees | Opinion
