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State of Illinois 457 (Deferred Comp) Changes
Old 02-27-2015, 03:29 PM   #1
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State of Illinois 457 (Deferred Comp) Changes

Information has been given to participants in the Illinois 457 plan (I started using it in 2006, I think) about upcoming changes.

They have hired investment advisors to make adjustments to the offerings. I've used, for nearly all the time I've been enrolled, three investments: Invesco Stable Return, Columbia Acorn Z (ACRNX), and Vanguard Total US Bond Index Institutional Plus (VBMPX).

The custodian for participants' assets is T. Rowe Price.

Two of the changes affect me: all ACRNX balances will be transferred to a new plan offering, Franklin Small-Cap Growth R (FSSRX), and a change in share class to a higher-expense Vanguard equivalent (VBTIX, not Institutional Plus, but still US Total US Bond Index Institutional).

Another change for new participants is a default direction of contributions to a target date retirement fund... run by T. Rowe Price.

I'm not planning on making any changes, although I have been slowly transferring money from ACRNX into the stable value fund for a little while now. I had never heard of that Franklin fund, but it's now on my "watchlist".

I think this is an example of a general trend for employee retirement plans.


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Old 03-10-2015, 03:39 PM   #2
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Here's another thing I learned after looking more closely at the announced upcoming changes in this Illinois 457 plan: not only are new contributions directed to a target date trust by default (the one that most closely matches the year in which you turn 65), but existing assets will also be transferred into one of the target date trusts (unless you take action to instruct them to leave what you have stay where it already is).

In my opinion, that's an unwelcome overreach.

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