The National Tax-Deferred Savings Association (NTSA) recently helped pass a bipartisan bill in the final hours of the Illinois General Assembly that involves 457 auto-enrollment—and specifically protects participant choice—for Illinois teachers.
“Providing choice and an opportunity to work with a trusted advisor of one’s choice is a major benefit for educators in their supplemental retirement plans,” NTSA Executive Director Nathan Glassey, TGPC, QKA, said. “This is a huge victory for the educators in Illinois.” 
More specifically, the bill would amend the school code to provide that a financial institution or investment provider, by entering into a written agreement, may offer or provide services to a plan established or maintained by a school district with an enrollment of at least 1,000 students if the written agreement is not combined with any other written agreement for the administration of a school district’s 457 plan.
It would also provide that each school district that provides a 457 plan make available to participants at least four financial institutions or investment providers that have not entered into a written agreement and that provide services to the school district’s 457 plan. Lastly, it would set forth requirements for a financial institution or investment provider providing services for a 457 plan.
“NTSA and interested parties authored and negotiated a bi-partisan bill through the legislature that helps improve the original 457 auto-enrollment bill (passed in 2021) by providing choice along with the auto-enrollment feature,” Glassey added. “The fact that our legislative champions moved this bill through both the House and the Senate on the last day of session highlights NTSA’s commitment to Illinois. We cannot understate the significant effort our hard-working sponsors, Senator Michael Halpin (D-Rock Island) and Representative Stephanie Kifowit (D-Aurora), made to advance public policy that will keep choice open in the Land of Lincoln.”
Initially presented as a “four plus one” in the 457 plan, like the NTSA’s successful lobbying efforts in Pennsylvania, it was ultimately narrowed down to only “plus one,” meaning it at least consists of the TRS vendor plus one other vendor. Yet it applies to school districts with more than 575 teachers rather than those with 1,000 students that the NTSA initially lobbied for.
“The big part of what this does is allows the 457(b) plan to add one vendor at a minimum to the plan,” Glassey concluded. “It opens up educators’ access to a trusted advisor of their choice so they can go and work with anyone they want on their retirement plan. Glassey added there now are up to 30 days for it to go to Gov. J.B. Pritzker’s (D) desk and then up to 60 days for him to take action.
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