Chicago Teachers Union Opposes Move to Central Recordkeeper

May 4, 2009 ( - The Chicago Teachers Union is in disagreement with Chicago Public Schools' decision to hire a central recordkeeper for the district's 403(b) and 457 plans in an effort to reduce participants' expenses.

CTU President Marilyn Stewart says district officials are meddling in teachers’ financial affairs, according to the Chi Town Daily News. However, CPS officials say that with Great-West as a central recordkeeper, they expect employees who contribute to their retirement plans to save about half a percent in investment fees.

“When you project that out to the average employee here, it means well over $10,000 more at retirement,” said Ron Huberman, chief executive officer at the district, in the news report. “We’re doing a terrible disservice to our people right now with the current plan.”

According to CPS officials, about half of 43,840 employees at the district voluntarily contribute to their 403(b) and 457 plans, and they can choose from six fund managers to invest their contributions, paying various investment fees based on which funds they select. Part of plan expenses are administrative, an area CPS officials said they targeted when they recommended Great-West to handle recordkeeping and administration after a competitive bid process.

Participants would still be able to invest in the same funds they currently do.

According to the news report, Stewart’s response to the cost-savings argument was: “If I get an adviser who’s going to charge me an arm and a leg, and that’s my crazy choice, you shouldn’t be the one to say, Marilyn, you can’t do that.”