Illinois Teachers’ Retirement System Announces New Supplemental Savings Plan
Earlier this week, the Illinois Teachers’ Retirement System sent out forms and instructions for its new Supplemental Savings Plan. Essentially, the Plan is a program for the deferral of income taxes on a portion of the compensation of teachers and other licensed employees under Section 457(b) of the Internal Revenue Code. TRS is required to offer the Plan to eligible school district employees due to an amendment to the Illinois Pension Code which became law in August of 2018. TRS is requiring school districts to participate in the Plan, with Board action and return of the specified documents by no later than March 31, 2021.
We are reviewing the Plan, which, on first impression, appears to be an overall appropriate 457(b) plan. However, there may be some potential issues and complications with the Plan, especially for those districts which already offer, or might choose to offer, their own 457(b) plan. While TRS is requiring all districts to participate, we are reviewing whether such a mandate is authorized by the Pension Code. If not, districts should be able to exercise their discretion on whether to approve the TRS Plan. We have reached out to TRS and hope to have additional information within a week or so. In the meantime, TRS will likely issue an employer bulletin next Tuesday or Wednesday and questions should be directed to Todd Faulkner.