Monmouth-Roseville is offering a new type of retirement plan for their employees as educators across the state are becoming less reliant on the largest pension system in the state.
Illinois public school teachers are required to contribute to the Teacher’s Retirement System.
But Superintendent Ed Fletcher explains that the 457b plan that is being offered to District 238 employees after board approval Tuesday night is another investment option for teachers to put pre-taxed dollars into.
Retired teachers who first contributed to TRS before 2011 will get a 3 percent compounding cost of living increase per year in retirement.
There have been gradual benefit decreases from TRS for retirees and legislation geared at encouraging contributors to cash out or contribute to different kinds of plans.
Fletcher tells WGIL that teachers should be less reliant on TRS for retirement.
“We feel like teachers are going to have to be able to invest more of their money for their future retirement needs and we just want to give them as many options as we can.”
Fletcher’s not sure this new option necessarily makes 238 a more attractive place to work, but says he wants to make sure employees have a full range of investment options when they do work there.
Fletcher just wants teachers to be educated on their options so they’re prepared. He says TRS, which is about 40 percent funded, likely will be smaller of part of educators’ post-career cash flow.
“It’s not being said, but when you have a tier-two to tier-three plan, which have differing benefits than a tier-one plan, I think if you read the tea leaves it’s telling you, ‘you better start taking more control of your own retirement.’ I can read that just like anybody else.”
Teachers have already had a Roth 403b available to them, a retirement plan for certain occupations including public schools employees and works like a 401k.
