TRS Ready to Implement “Opt-In” Elections for the Supplemental Saving Plan
Jan 5, 2022
In 2018, the Illinois legislature amended the Illinois Pension Code to add a requirement that the Teachers Retirement System (TRS) provide an optional defined contribution benefit to all eligible members of TRS beginning in 2021, which is known as the TRS Supplemental Savings Plan (“SSP”). Last year, the Pension Code was further amended to clarify that TRS-covered employers must participate in the SSP through TRS. It also established automatic enrollment in the SSP and contribution amounts for new members on or as soon as practicable after January 1, 2022, unless the new member expressly opt-outs of enrollment. TRS has advised it is not ready to implement the automatic enrollment provisions of the SSP. Until that time, any existing eligible member must opt-in to the SSP if they wish to participate. The SSP is administered by Voya Financial.
Overall implementation of the SSP was delayed by TRS. In November 2021, TRS announced that it was prepared to implement “opt-in” elections for eligible existing employees. These eligible employees can begin to sign up for the SSP as soon as January 10, 2022, provided their employers have formally agreed to offer the SSP. TRS further announced that enrolled SSP participants will make their initial payroll contribution to the SSP on or after March 1, 2022. Implementation of the “opt-out” part of the SSP is expected later this year.
In connection with the SSP, TRS-covered employers are responsible for the following:
- Employment Status Reporting: Employers are required to report employment status accurately so that employee eligibility can be determined. Participation is limited to full- and part-time contractual teachers, and specifically excludes substitutes, part-time non-contractual, or extra duty only employees.
- Contribution Processing: Employers are required to enter into salary reduction agreements with participating employees, and then remit the elective deferrals and any employer discretionary contributions (if any) to TRS. Employees should be able to locate the form salary reduction agreement process at https://my.voya.com/voyassoui/index.html?domain=trsilssp.voya.com. Employers must report SSP contributions to TRS in one of two ways: Data Entry / Replication Process or File Upload Process.
- Contribution Limit Monitoring: Employers must monitor the employee’s contribution limit as provided by the IRS (for 2022, the contribution limit for 457(b) plans is $20,500, unless an employee is eligible to make catch up contributions). The limit is for all contributions by an employee to any qualifying 457(b) plan.
The TRS publication with a detailed overview of the SSP and employer responsibilities can be found here: https://www.trsil.org/sites/default/files/documents/FY22-15.pdf.
If a TRS-covered employer has not already done so, a resolution and Employer Participation Agreement should be adopted by the governing board as soon as possible to allow eligible employees to enroll in the SSP. If already adopted, employers are to complete an Authorized Contact form which is available on the TRS website.
To assist TRS-covered employers in meeting its obligations to offer the SSP, our firm has developed model forms including a resolution, guidance document, checklist, and sample notice to employees, and notice to union(s). These model forms are available for a flat fee. Please contact Joseph J. Perkoski, Catherine R. Locallo, or Susan E. Nicholas for fee information, the forms, or if you have questions related to implementation.