State of Illinois Employees' Deferred Compensation Plan will issue an RFP for a record keeper and possibly for a new investment platform that could broaden the universe of managers for the $2.6 billion plan, said William R. Atwood, executive director of the Chicago-based Illinois State Board of Investment, fiduciary to the plan.
"At this time, there are no anticipated changes to fund options (managers) in the deferred comp plan," Mr. Atwood said, but fund officials intend to ask record keepers to provide proposals for both the existing platform, which provides only for mutual funds, and for a new institutional structure that would also allow separate-account managers and commingled trusts. The board plans to evaluate the two types of proposals to see whether moving to a new, broader structure offers more advantages than the existing structure. Allowing for separate-account managers and commingled trusts could provide a saving in investment management fees and expand the universe of managers, he said.
While the fund has no plans to change managers now, "obviously down the road it would be a benefit," said Charles E. Osborne, managing director at Iron Capital Advisors, consultant to the plan, which is assisting in the search. A new platform "could be more work for a record keeper to unitize separately managed accounts."
T. Rowe Price, the incumbent record keeper, will be encouraged to rebid, Mr. Atwood said. The plan now offers 13 mutual funds. "We are very happy with T. Rowe Price," Mr. Atwood said, "but it is time to look" at record-keeping services and a new potential platform."
The RFP could be issued by the end of January, and the board could interview finalists and decide on which platform to use at its March 23 meeting, Mr. Atwood said.