NTSA Spikes Ball on 457(b) Legislative "Win"

June 6, 2023

The National Tax Deferred Savings Association (NTSA) pushed 457(b) legislation over the goal line in the waning moments of the most recent Illinois General Assembly. They call it a major win for educator choice. But what really happened? It is the opinion of myself and many others that...

Gaslighters Gonna Gaslight

When it comes to the 403(b) and the 457(b), the NTSA, a lobbying organization whose operating mission is to maintain the broken, high-cost, multi-vendor K-12 system, takes duplicity to the next level. From their comically deceptive Certified Retirement "Specialist" Program (CRES) where salespeople “teach” educators about financial literacy to their bogus “research” intended to justify their goals (see NTSA Goes Cherry Picking), you almost have to tip your cap at the Waystar Royco-like depths they are willing to plumb. Sidenote: I couldn’t resist deploying a little hyperbole but as far as we know, Logan Roy et al. never went after teachers. 

What Really Happened in Illinois

The NTSA hired a lobbyist — Zephyr Government Strategies — and somehow got two legislators Senator Michael Halpin (D-Rock Island) and Representative Stephanie Kifowit (D-Aurora) to support a bill to deny certain school districts (27 large districts but not Chicago Public Schools) the ability to maintain a single vendor 457(b) plan. The initial bill was opposed by 19 groups, including 403bwise.org. It was supported by exactly one group: the NTSA. But in the closing hours of the legislative session the NTSA-Zephyr-Halpin-Kifowit quad squad punched newly numbered legislation — SB0734 which suddenly had zero opponents — into the endzone. So despite losing 19 to 4, NTSA won. Anyone remember the 1972 Olympics U.S. vs. Russia basketaball game?

Trusted Advisor?

The NTSA hails the legislation for allowing teachers access to a "trusted advisor". Of all the gaslighting this organization has engaged in over the years, this may be their gassiest. When they use this term they are not referring to the type of advisor we have long advocated for: a fiduciary one who must pledge to put the interests of their client first. They are referring to the same salesperson trawling school district staff lounges, and educator email in-boxes which have made the K-12 403(b) a cesspool of high fees and surrender charges.  

You Can Judge a Party by Its Attendees

Upon passage of the bill, who celebrated this “accomplishment”? 

• The group that was paid to push it through (see picture 1).
• The head of the lobbying organization who crafted the legislation (see picture 2)
• An employee from a financial company (Equitable Financial) who stand to benefit (see picture 3)

A Lobbyist, the Head of the NTSA, and an Equitable Rep Walk Into a Bar

So a lobbyist, a lobbying organization, and an employee for a company that was recently fined $50 million by the SEC gleefully celebrate the passage of this legislation? Yeah, that bodes well for Illinois educators. Hello Illinois Education Association? Are you there? Are you actually representing the best interests of teachers?

Did the Sponsoring Legislators Even Understand the Bill?

In our most recent podcast we interviewed an Illinois teacher who contacted the offices of Halpin and Kofowit to discuss this bill. You may or may not be surprised to learn that the overworked staff didn't understand the bill. You may or may not be surprised to learn that multiple efforts by 403bwise.org to speak with the legislators were rebuffed. 

Still Time for a Hail Mary

As of this writing the bill has yet to be signed into law by Gov. J.B. Pritzker’s (D). Once it reaches his desk he’ll have 60 days to take action. Teacher advocates still have time to express their displeasure at this anti-competitive legislation. You can contact the governor here. Below are questions to ask. 

1. Why specifically are you supporting this legislation?
2. How does this bill help educators keep costs down?
3. Why would you take away a school district's ability to competitively bid its 457(b) plan?
4. Why doesn’t this legislation apply to other 457(b) eligible employees like police and firefighters?
5. Why does this legislation only apply to 27 school districts?
6. How do you think this legislation will affect the state’s new 457(b) plan which is working to grow assets under management?
7. Have you engaged Illinois teachers on this issue?
8. How much do you know about the NTSA, the only entity supporting this legislation?
9. What is your definition of a trusted advisor and how do you think the state will ensure that only trusted advisors will be used?
10. Are you worried about a lawsuit if in fact the "advisors" turn out to be not-so-trustworthy?
     

Stay wise and well (and know it's not too late to lobby against SB0734, and that the NTSA isn't stopping with Illinois)

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