Update Regarding Annuity Withdrawals
Some CTU members have encountered delays and problems attempting to access funds in their 403(b) Tax Deferred Annuity or 457(b) Deferred Compensation defined-contribution retirement plans. To clarify, this problem is not related to regular, pre-scheduled disbursements for retirees. That is, these problems only affect retirees (and, potentially, a small number of active members) who attempt to make special withdrawals.
Key information to avoid pitfalls
- Contact your plan vendor first, if you need to make a special withdrawal. To clarify, you may have established your retirement savings plan through Valic, Horace Mann, or another vendor. Currently, VOYA oversees all CPS retirement plans. However, VOYA is simply a third-party administrator contracted by Chicago Public Schools for administration purposes. Initially, you need to contact the vendor (e.g. Valic or Horace Mann) before taking the other steps. Your vendor must authorize the withdrawal.
- If you retired prior to 2013, the vendor will provide you with paperwork to fill out. The vendor will forward your request to VOYA.
- If you retired in 2013 or later, you can proceed directly to the Plan with Ease website, where you must submit your request.
- If you have questions, you can reach VOYA at 630-245-4082.
Defined-Contribution Retirement Plans General Information
For more information, the sites below offer CPS’ information on the two types of plan mentioned above.
Defined-Benefit Retirement Plans vs. Defined-Contribution Plans
The 403(b) and 457(b) — like their private-sector counterpart the 401(k) — are defined-contribution plans. Defined-contribution plans let employees make pre-tax contributions to their accounts. In such plans, the employee bears all the responsibility for investing that money wisely. By contrast, defined-benefit plans, like our pensions, guarantee employees specific monthly payouts when they retire. Responsibility for investing money to provide those benefits rests with the plan’s board of directors, who generally make better-informed investment decisions and work to diversify risk on a larger pool of money.
Financial corporations initially created defined-contribution plans to supplement defined-benefit retirement plans. While defined-contribution plans offer the possibility of stronger returns because you can tailor your investment strategy, they also carry tremendous risk because they depend on market conditions to provide retirement. For most workers, however, sole reliance on these riskier retirement plans has become the norm.
CTU members have defined-benefit plans in either the Chicago Teachers’ Pension Fund (the CTPF, for teachers and clinicians) or the Municipal Employees’ Annuity and Benefit Fund of Chicago (the MEABF, for PSRPs). The 403(b) and 457(b) retirement plans offered by CPS are supplements to our pensions, as they were originally designed to be.
Our defined-benefit pensions have been under sustained attack for decades. CTU has fought and won reforms to sustain the CTPF and helped win a major lawsuit to defend benefits for the MEABF against Rahm Emanuel’s attacks. Our union will continue to defend our members’ pensions, pay and benefits. Join the fight!