SPRINGFIELD,
IL – Teachers’ Retirement System Board of Trustees has selected Voya Financial
to administer the new TRS Supplemental Savings Plan, a defined-contribution
retirement vehicle that TRS members can elect to supplement their TRS pensions.
Voya Financial, of Windsor, Connecticut, will administer the SSP
as a voluntary 457(b) style plan that allows participating members to
contribute a portion of each paycheck to a savings account that is then
invested on their behalf.
Voya is a national leader in administering defined contribution
retirement plans for educators. Currently, the firm manages $568 billion in
assets for more than 13.8 million clients. Voya manages existing retirement
plans through teacher retirement systems in Indiana, Pennsylvania and California,
among others.
A 2018 state law requires TRS, for the first time, to offer a
defined-contribution (DC) plan to its active members “as soon as practicable.”
The target date for implementing the new SSP is 2020.
The new SSP will be “an optional benefit to any member who chooses
to participate” if the member is active in Tier 1 or Tier 2. Retired and
inactive TRS members will not be eligible.
The SSP does not replace the existing pension for participating
members. TRS members cannot opt out of the pension plan and place their DB
contributions into the SSP. Participants in the SSP will effectively have two
TRS sources of income in retirement – a pension that guarantees a specified
benefit every month, and a “savings account” that they can draw on as they see
fit.
The law requires participants to make contributions to the SSP.
Contributions from employers are optional. No state funds will be contributed
to the SSP.
The law also requires TRS to “offer investment options” to
participants. All fees to private companies managing SSP investments, as well
as the cost of administering the plan, will be paid by participant
contributions.
Dave
Urbanek
Director
of Communications
Teachers’
Retirement System of the State of Illinois
P.O.
Box 19253, 2815 W. Washington Street
Springfield,
Illinois 62794-9253
Note: Current teachers will still pay 9% of their yearly salary for their defined-benefit retirement plan. The above TRS Supplemental Savings plan is an additional defined-contribution savings option available for them next year.
ReplyDeleteHowever, many teachers already contribute an additional part of their salary to a 403b plan through Fidelity, Vanguard et al.