PROVIDENCE – The R.I. State Investment Commission has chosen TIAA-CREF to manage the new 401(k)-style defined-contribution pension plan being created for public-sector workers as part of the recent pension system overhaul, Treasurer Gina M. Raimondo announced Monday.
New York-based TIAA-CREF was picked over Great West Retirement Services in a unanimous vote by commission members after hearing presentations from both finalists.
TIAA-CREF had the lowest bid of the finalists, agreeing to a management fee of $32 per enrollee, Raimondo Spokeswoman Dara Chadwick said.
“Our goal was to choose a provider whose priorities are low-cost and secure investment products, along with robust and dependable customer service,” said Raimondo, who heads the Investment Commission, in a news release. “We have accomplished that with the selection of TIAA-CREF.”
Moving a portion of state workers’ retirement savings into a defined-contribution plan accompanying the traditional defined-benefit plan was a central piece of the sweeping state pension system reform bill passed last year by lawmakers. The plan changes were strongly opposed by public-sector employee unions.
The plan is expected to cover around 30,000 workers making annual contributions of between $100 million and $150 million.
TIAA-CREF and Great West were picked as finalists by the Investment Commission earlier this month out of four semifinalists that also included Fidelity Investments and ICMA Retirement Corp.
The new defined-contribution plan is expected to be launched in July.