Supplemental Retirement Plan Transition
Information and resources for CPS employees and retirees
About the Upcoming Transition
Effective January 1, 2022, CPS will move to a single provider for its defined contribution (DC) plans: AIG Retirement Services. This webpage is designed to help employees and retirees understand why we’re making this transition, what it means for you, and answer your questions.
Here are a few important things to know right now:
- No action is required of you at this time.
- We’re here to help. Starting in October, CPS and AIG Retirement Services will provide detailed information regarding this transition through personalized phone and email customer service and support resources, as well as webinars, to help active, retired and new participants get answers to questions related to their accounts. In the meantime, employees and retirees may email us questions at DCplans@cps.edu.
- Check back for more updates and resources. This page will update again in October with dates and registration links for informational webinars to answer your questions and provide guidance during this transition.
CPS Supplemental Retirement Plans: 101
Transitioning to a Single DC Plan Provider
Why We're Making This Transition
To enhance our employees’ access to a secure retirement, CPS offers optional, supplemental tax-deferred retirement plans, which are in addition to your earned pension benefits. These 403(b) and 457(b) defined contribution (DC) plans are an important retirement planning tool for many of our employees and retirees.
As with all employer-sponsored DC plans, CPS engages professional financial services firms that offer investment products to our participants: AIG Retirement Services, Empower, and Voya. Effective January 1, 2022, AIG Retirement Services will be the district’s single DC plan provider.
CPS strives to offer high-quality retirement plans that evolve as the industry improves, and this transition follows an extensive internal review of our plans and service providers, as well as an RFP process seeking a sole provider in March 2021. An Evaluation Committee, including current and retired CPS staff, CTU representatives, and independent financial services experts who oversaw the four-month evaluation process, selected AIG Retirement Services as the strongest candidate and referred the committee’s recommendation to our Board of Education, who approved the recommendation at their September 22 meeting.
Retirement Plans Offered
In addition to the Chicago Teachers' Pension Fund, CPS offers union and nonunion employees two kinds of supplemental retirement plans — a 403(b) plan and a 457(b) plan. These are "defined contribution" (DC) plans, which differ in several ways from a "defined benefit" (DB) pension plan.
Defined Benefit (DB)
Supplemental Retirement (DC)
|Statutory requirement||Optional benefit|
|Employer/Employee contributions||Employee-only contributions|
|Retirement formula determines benefit||Employee experience determines benefit|
|Employer makes all investment decisions||Employee makes all investment decisions|
|Benefit payments remain a plan liability||No employer liability for benefit payments|
|Employer pays cost of managing plan||Employee pays cost of managing plan|
What This Means For You
Moving to a sole provider brings benefits to you.
The new CPS Supplemental Retirement Plan with AIG Retirement Services, and its offerings, will provide a range of best-in-class, low-fee investment options to improve retirement readiness for all CPS employees and retirees. Moving to a sole provider brings significant benefits, including:
- A lower and more transparent fee structure.
- 100% dedicated and salary-based retirement plan consultants providing objective retirement education and plan service support.
- An enhanced and simpler user experience for participants (including an easy-to-use mobile app) for everything from enrollment and salary deferral changes to account transaction requests.
No action is required of you at this time.
Starting in October, CPS and AIG Retirement Services will provide detailed information regarding this transition through personalized phone and email customer service and support resources, as well as webinars, to help active, retired and new participants get answers to questions related to their accounts.
Starting January 1, 2022, payroll contributions for active CPS employees participating in the current DC Plan will be directed to the new single provider. New participants in the CPS Supplemental Retirement Plan after January 1, 2022 will enroll directly in the AIG Retirement Services platform and investment portfolio.
Employees and retirees participating in DC plans currently offered by AIG Retirement Services, Empower or Voya have the option, but will not be required, to transfer their existing Plan balances to the new AIG Retirement Services investment platform. For those who choose that option, transfers will take effect on January 1, 2022. For those who choose not to transfer their plan balances, please contact your current service representative directly regarding the continued servicing of your accounts.
Single-Provider Platform Benefits
In recent years, many K-12 and higher education institutions' DC plans across the country have moved to a single-provider platform to improve employees' and retirees' access to lower cost investment options and cut down on overlapping investment strategies.
|Vendors compete to enroll participants||One vendor manages all participant plans|
|Complicated array of overlapping and similar investment options with different fee structures||Simpler, higher-quality array of investment options that maintains fixed-rate annuities|
|Higher fees||A lower and more transparent fee structure|
|Savings scattered across different providers with confusing user experiences||Improved user experience for participant enrollment and account changes|
|Commissioned sales agents||Salaried representatives providing objective advice|
|More difficult for plan sponsor to monitor multiple providers with numerous representatives and services||Stronger participant protections and plan oversight|
Decision & Transition Timeline
Evaluations & Selection Process
March - July 2021
CPS issues a Request for Proposals seeking a sole DC plan provider and forms an Evaluation Committee comprised of diverse stakeholders to oversee the selection process.
Late July, 2021
The Evaluation Committee votes to select AIG Retirement Services as the sole provider for CPS' DC plans.
September 22, 2021
The recommendation is presented to the Chicago Board of Education for approval at its September 22 meeting.
October - December, 2021
CPS works with AIG Retirement Services to provide a variety of informational resources and support to DC plan participants to ensure a smooth transition, including a series of webinars to allow participants to learn more about the options being offered by the newly designed CPS Supplemental Retirement plan.
January 1, 2022
Official transition to single-provider platform takes place on January 1, 2022.