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UPDATED INFORMATION FROM CMS CONCERNING THE DEFERRED COMPENSATION RECORD KEEPER CHANGE INFORMATION
If you are an investor in State of Illinois Deferred Compensation program you are now aware that the recordkeeper is changing July 1, 2022, from T. Rowe Price to EMPOWER. The change has generated questions and concerns from RSEA membership. RSEA received the following from CMS Benefits Deferred Compensation in response to those questions and concerns.
- There is no new cost to buy and sell investments. That will not be changing. Additionally, the investment lineup will not be changing.
- Prior to the RFP, CMS had not heard of Empower either. However, they are the second largest retirement plan recordkeeper (by participants) in the country. They have 17 million participants in their plans and provide recordkeeping services for 30 other State plans like our own. More details may be found on their website. WWW.EMPOWER.COM
- In order to ensure that services and fees are appropriate for our Plan, it is a best practice to periodically conduct a competitive bidding process for recordkeeping services. In following this guideline, a request for proposal (RFP) was issued in 2021. During the process, T. Rowe Price declined to submit a full response to the RFP. After a thorough review and evaluation of the recordkeepers that did respond, Empower was selected as the new provider. The RFP, and it’s requirements, can be found on the Illinois State Board of Investment (ISBI) website www.isbinvestment.com/media/rfp/.
Regarding the negative publicity about EMPOWER that RSEA members have been finding online, I would keep in mind that Empower is a workplace retirement services provider. Your average participant in one of their 71,000+ plans is not likely to leave a review unless they have had a negative experience. Furthermore, each one of the plans they service have been set up independently with their own unique plan design. Many of the negative reviews appear to be related to issues that would not apply to our Plan.
Further questions can be directed to CMS Deferred Compensation at 217/782-2548 Option 3 or 1-800-442-1300 Option 3.
Summary of the Deferred Compensation Recordkeeper change notification:
DEFERRED COMPENSATION RECORDKEEPER CHANGE
The State of Illinois Deferred Compensation Plan management is transitioning from T. Rowe Price to Empower, effective July 1, 2022. A transition guide containing details was sent to participants mailing address via postal mail from Central Management Services (CMS) during June and is available online at MYILLINOISDCPLAN.COM.
Changes can be made to a participants Plan with the current manager T.Rowe Price until 3:00 pm CT on Monday, June 27. There will be a blackout period beginning at 3:00 pm CT on Monday, June 27 through the week of July 10, where fund transfers, investment elections, and deferral changes will be unavailable. Participants will be notified by Empower when the blackout period ends.
Highlights:
Plan administrative fees are not changing.
- Please check beneficiaries after the transition because any designations made on paper and submitted to CMS prior to July 1, 2020, will not be reflected on your online Empower account. However, they will remain on file with CMS. Participants are encouraged to verify beneficiary designations and update them electronically with Empower.
- During transition assets will remain in the same funds they are currently in.
- Banking information will be securely transferred to Empower.
- No changes to timing or processing of loan payments or installment payments.
- No changes to scheduled distributions. Payments will now come from Great-West Trust Company LLC
Questions?
Please refer to the transition guide online at MYILLINOISDCPLAN.COM or call Empower at 833-969-4532 Monday through Friday, 7:00 am to 9:00 pm CT and Saturdays 8:00 am to 4:30 pm CT.
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