Iowa Teachers’ 403(b) Plan Now Open to More Competition

In May 2017, Iowa Gov. Terry Brandstadt (R) signed HF 569 into law opening up the Iowa teachers’ 403(b) plan to greater competition. The bill requires the Iowa Department of Administrative Services (DAS) to include up to 30 insurance and investment companies in the 403(b) plan. The Iowa Insurance Division first had to approve those companies before they could be included, and the DAS director required them to utilize the third party administrator selected by the department and a common remitter.

The Iowa Retirement Investors’ Club (RIC) and the DAS, which oversees the program, recently concluded their invitation to qualify (ITQ) process for new providers. Effective July 1, 2018, the following NTSA partners can offer their services in the state: GEWN, EFS, VALIC, AXA Equitable, Security Benefit and National Life Group.

Iowa RIC is a supplemental retirement savings program DAS oversees that provides 403(b), 457 and 401(a) plan administration, compliance, investment options and services for participating Iowa public sector and education-related employers and employees.

At a Dec. 2017 hearing before Iowa Legislature’s Public Retirement Systems Committee, DAS Director Jane Phipps provided the following information concerning the 403(b) and 457 programs that are part of the RIC:

Program	Active      Participants	Annual           Contributions	Assets
403(b)	13,000	$67,691,607	$317,391,302
457	14,638	$51,210,936	$839,108,297

 

Legislative Note: The Iowa legislature wasted no time — the bill was introduced in the state House of Representatives on March 8, and the chamber passed it in a 65-31 vote 20 days later. On the day the House passed it, the bill was sent to the Senate; that chamber passed it 41-8 just 15 days later. Brandstadt subsequently signed HF 569 into law on May 9.

Joseph A. Caruso, III, JD, MSPPM, is Government Affairs Counsel for the American Retirement Association.