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krow36

Chicago Public School Single Vendor 403b/457 Plans

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washateria recently posted on the 457 board about their Chicago Public School’s (CPS) 403b and 457 plans. The CPS plans are an impressive improvement over the usual multi-vendor, mostly annuity-based plans most K-12 (K-14?) districts are saddled with. The single provider for the CPS 403b and 457 plans is Great-West Life & Annuity Insurance Company (GWL&A). There are a small number of mutual funds offered, and no annuities. 
Index funds:
9 Vanguard Target Retirement 20XX Inv, ER 0.13% to 0.16%
Fidelity Total Market Index Inv, ER 0.05%
Vanguard FTSE All-World ex-US Index Inst, ER 0.10%
Vanguard Total Bond Market Index Adm, ER 0.05% 

9 managed funds , ERs 0.33% to 0.94%
https://cpsretirementplans.gwrs.com/wrFundOverview.do?accu=CPSWR&groupID=93402-01&db=pnp

How about fees? There are 3 fee levels:
1. There appears to be no additional fees for DIY employees using Online Investment Guidance.
2. There is a $25 annual fee for Online Investment Advice.
3. To have the account managed by AAC (a subsidiary of GWL&A), there’s a fee based on the account balance, starting at 0.1625% (<$100k) and decreasing to 0.0875% (>$400k) in 3 steps.
https://cpsretirementplans.gwrs.com/preLoginContentLink.do?accu=CPSWR&contentUrl=preLogin.aboutPlan.invInfo&specificBundle=preLogin

CPS is one of the largest districts in the country, and perhaps the low fee structure would not be possible in smaller districts? Of course states (CA, WA, etc.) with a law that prohibits a reduction in number of vendors would prevent this sort of improvement. Do you agree with me that a plan like this is interesting and worthy of discussion on 403bwise?  

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Using Search, I see that Tony discovered this CPS 403b and 457 plan back in August, 2015. 
http://board.403bwise.com/topic/6011-choosing-a-supplemental-retirement-plan/?tab=comments#comment-32870

In January 2007, CPS’s 403b vendors were: AIG VALIC, ING, Horace Mann, Hartford, Metlife, CitiStreet, and Prudential. 
http://board.403bwise.com/topic/1850-chicago-public-schools/?tab=comments#comment-11936

VALIC and ING (VOYA) are still grandfathered in the current plan.

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Indeed, Scott helped me with understanding the true fees after I was featured on the Pod with a couple of my students. When we looked in, we found it extremely difficult to clarify the fee structure (took probably a combined 2hrs of phone calls and some math problems looking at paperwork) but discovered, as you point to, that the fees are comparatively low.

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