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washateria

Need help- Chicago Public School System 403B and 457 Plans

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Hi Everyone,

I am new to the board.  I want to start out by saying how grateful I am in advance for this resource and for any help you can provide.  My wife is a new teacher in Chicago Public School system and we are looking at her investment options.  We apparently only have two choices -- VOYA and VALIC.  I took a cursury glance at these.  Good option seemed to be in Valic---Vanguard Total Bond Market Index 30% and Fidelity Total Market Index Inv 70%. Second choice option: Vanguard Target Retirement Funds but the fees are much higher than I liked.   I am not sure if these are in the 457 plan or the 403b Plan My wife would rather have flexiblity of 457 if it is possible.

Would love to hear what you guys think of the Chicago Public School District Options.  

Thank you very much in advance.

-Kristy

Fund Overview – Provides the investment objective, holdings, a breakdown of the fund's assets by industry, the risk level, and the fund manager for each of your available investment options.

Fund Performance – Lists all of the available investment option returns for: year to date, one year, three years, five years, 10 years or since inception.

Online Prospectus –The most up-to-date regulatory documents associated with your Plan, including fund prospectuses, annual reports and semi-annual reports.

 

 

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Kristy, welcome to the forum. Sorry for the delay in answering your post. This 457 board doesn't get checked as often as the 403b board.

It looks like CPS has done a fantastic job of moving from VOYA and VALIC, which are grandfathered providers. That means that you cannot start a new account with them, but current accounts are allowed to continue. CPS now has a small selection of funds that include some great index funds. I think using the TSM and TBM funds you mentioned is a great way to go, as is using a Target Retirement fund.

I couldn’t find any reference to an administration fee unless you wanted an advisor—there only seems to be each fund’s expense ratio for DIYers. 

Quote

Or if you prefer to manage your retirement account on your own, you can use the Online Investment Guidance and Online Investment Advice tools.
What fees do I pay to participate in Advisory Services?
While there is no cost to use Online Investment Guidance, there is a $25 annual fee, assessed at $6.25 quarterly, for Online Investment Advice.
https://cpsretirementplans.gwrs.com/preLoginContentLink.do?accu=CPSWR&contentUrl=preLogin.aboutPlan.invInfo&specificBundle=preLogin

 The CPS website indicates with their heading that all their funds apply to both the 403b and the 457 plans. If you check out the application form you’ll be able to confirm it. I agree that the 457 has an advantage over the 403b if you can only fund one of them. 

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On 11/17/2017 at 8:17 AM, washateria said:

Fund Overview – Provides the investment objective, holdings, a breakdown of the fund's assets by industry, the risk level, and the fund manager for each of your available investment options.

Fund Performance – Lists all of the available investment option returns for: year to date, one year, three years, five years, 10 years or since inception.

Online Prospectus –The most up-to-date regulatory documents associated with your Plan, including fund prospectuses, annual reports and semi-annual reports.

Please forget about VALIC and VOYA. They are grandfathered but are not available for new accounts. CPS now has 403b and 457 plans overseen by EMPOWER, and the 3 links above that you provided are to the funds available through EMPOWER.

The ERs of the Vanguard Target Retirement fund are only 0.15% which is actually quite low. If you want the simplest, most diversified single fund, one of them would be an excellent choice. However the ERs of the Fidelity Total Stock Mkt fund of 0.09% and Vanguard Total Bond Mkt fund of 0.05% are lower. If you used a 70% stock/30% bond asset allocation, the weighted average ER would be 0.072%. For a balance of $100,000, that amounts to only $72 per year. So the difference in ERs between you first and second choices is not very significant.

Have you downloaded the CPS 403b/457 plan application form yet? Is there an option to choose either a 403b or a 457 plan?  

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