WEST SACRAMENTO, Calif.--(BUSINESS WIRE)--The Teachers’ Retirement Board today selected ING U.S. as the new third party administrator, commonly called the recordkeeper, for the California State Teachers’ Retirement System supplementary savings plan, known as Pension2®.
Pension2 is the defined contribution part of the CalSTRS hybrid retirement system that also includes the traditional defined benefit pension and the defined benefit supplement, which is a cash balance program.
ING U.S., which will rebrand as Voya Financial in 2014, will take on its new role effective in the late summer or fall of 2014 on an eight-year contract with two one-year extension options. Specific contract terms are now under negotiation. The program’s current contract has been with TIAA-CREF.
“California educators have traditionally been under enrolled in low-cost, high-quality supplemental retirement savings options. Our desire is to increase participation by offering a competitive product that will enhance overall retirement security,” said CalSTRS Chief Executive Officer Jack Ehnes. “In a marketplace that offers CalSTRS members so many varied choices, some of which may not be in their best interest, we want educators to look seriously at the products and services we will be delivering with ING U.S.—soon to be known as Voya Financial—as our partner.”
The 2013 CalSTRS “Retirement Readiness Assessment Report” found that nearly three-quarters of working members are concerned about being able to afford medical expenses in retirement, while 40 percent of retired members reported spending more than expected on health care in retirement. The report is a comprehensive survey of the financial standing and retirement planning of California’s 653,000 active and retired CalSTRS members.
“Significant costs, such as healthcare, will be a fact of retirement life for our members. Having options, such as those offered through Pension2, allow members to prepare for these contingencies while they have the time to invest and grow their resources,” Mr. Ehnes added.
ING U.S. was among three bidders for the contract along with the incumbent, TIAA-CREF, and JEM Resource Partners. Since 1995, CalSTRS has offered its members, along with classified employees of CalSTRS-covered employers, the opportunity to invest through pre- or post-tax payroll deductions in low cost, flexible 403(b), Roth 403(b) and 457(b) plans for additional retirement savings. Pension2 currently has more than 11,700 participants and manages assets totaling more than $558.8 million.
“We issued the request for proposals in October, 2013 with the thought of offering our participants, if necessary, a seamless transition from one provider to the next,” said CalSTRS Director of Defined Contribution Solutions Sandy Blair. “With this contract, we plan to deliver on that expectation while expanding our program and offering our participants improved customer service.”
“We’re honored that CalSTRS has placed its trust in our business and our people,” said Jamie Ohl, president of Tax-Exempt Markets for ING U.S. Retirement Solutions. “This is a testament to the strength of our team and the commitment we have to providing clients—including some of the largest retirement systems in the country—with the integrated capabilities and distinctive value they want for the long-term. As an advocate for greater retirement readiness, ING U.S—soon to be known as Voya Financial—looks forward to helping guide the members of the CalSTRS supplemental savings plan on their journey to and through retirement.”
The California State Teachers’ Retirement System, with a portfolio valued at $180.8 billion as of February 28, 2014, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. CalSTRS serves California's 868,000 public school educators and their families from the state’s 1,600 school districts, county offices of education and community college districts.
About ING U.S.
ING U.S. (NYSE: VOYA), which will rebrand as Voya Financial in 2014, is a premier retirement, investment and insurance company serving the financial needs of approximately 13 million individual and institutional customers in the United States. The company’s vision is to be America’s Retirement Company and its guiding principle is centered on solving the most daunting financial challenge facing Americans today—retirement readiness. Working directly with clients and through a broad group of financial intermediaries, independent producers, affiliated advisors and dedicated sales specialists, ING U.S. provides a comprehensive portfolio of asset accumulation, asset protection and asset distribution products and services. With a dedicated workforce of approximately 7,000 employees, ING U.S. is grounded in a clear mission to make a secure financial future possible—one person, one family, one institution at a time. For more information, visit http://ing.us. Follow ING U.S. on Twitter @ING_USA and Facebook.