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TRS Hires Voya Financial to Administer New Voluntary Defined Contribution Plan

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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.

In other action during the Trustees’ regularly scheduled December meeting:

  • The Board gave final approval to a $5.1 billion state contribution to TRS for FY 2021. The Board’s preliminary certification of the contribution in October was reviewed and approved by the state actuary.
  • The Board hired StepStone Group of La Jolla, California, as the System’s investment consultant for private equity opportunities. StepStone was awarded a five-year contract that begins on January 1, 2020. The incumbent private equity consultant is TorreyCove Capital Partners of La Jolla, California.
  • The Board rehired StepStone Group as the system’s investment consultant for real estate and real asset opportunities. StepStone was awarded a five-year contract that begins on January 1, 2020. StepStone is the incumbent TRS real estate and real asset consultant
  • Within the System’s $6.3 billion Private Equity Portfolio:
    • The commitment of $125 million to RCP Advisors of Chicago. RCP currently administers $51.6 million in TRS assets.
    • The commitment of $44 million to SK Capital Partners of New York, New York. SK Capital currently administers $6.6 million in TRS assets.
  • Within the $8.1 billion Real Assets Portfolio:
    • Two separate commitments, one of €200 million and one of $100 million, to Exeter Property Group of Conshohocken, Pennsylvania. Exeter currently administers $28.9 million in TRS assets.
  • Within the $14.4 billion Global Income Portfolio:
    • The commitment of $125 million to Apollo Global Management of New York, New York. Apollo currently administers $524.9 million in TRS assets.
    • The commitment of $50 million to Solar Capital of New York, New York. Solar currently administers $175 million in TRS assets.
    • The total redemption of $392 million from an emerging market debt opportunities strategy administered by Franklin Templeton Fixed Income Group of San Mateo, California. Franklin continues to administer $766 million in TRS assets through another strategy.

About Teachers’ Retirement System

The Teachers’ Retirement System of the State of Illinois is the 37th largest pension system in the United States, and provides retirement, disability and survivor benefits to teachers, administrators and other public school personnel employed outside of Chicago. The System serves 434,313 members and had assets of $52.3 billion as of September 30, 2019.

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