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September 25, 2017

9/7/2017 1:55:00 PM
Illinois treasurer touring state to promote services
The state treasurer is Illinois' chief investment officer, but the position is much more than that, according to Michael Frerichs.

During a recent stop in Robinson, Frerichs discussed how, since being elected in November 2014, he has sought to increase revenues of the counties and tried to help provide consumers with what they need to improve their lives.

Much of these efforts may have gone unnoticed, however; the state has little budget to advertise them, he explained.

That was why the Champaign County native was touring this part of the state. "If no one hears or signs up for the programs, we really haven't done much good," he said.

Frerichs said he believes in providing individuals with the tools so that they can "invest in themselves."

He does this by encouraging savings plans for college and trade school, increasing financial education among all ages, removing barriers to a secure retirement and protecting residents from predatory companies.

Among the programs offered by his office are two designed to make higher education more affordable to Illinois residents.

The Bright Start and Bright Directions programs offer Illinois students a way to save for higher education through a variety of investment options. Savings can be used for tuition at two-year and four-year institutions, including vocational, trade, community and state or technical schools, either in Illinois or elsewhere. The programs also covers additional expenses such as room and board, books and a computer.

The goal is to allow students to get the educations they need to achieve better lives without accruing large amounts of debt.

"We want to make it easier for parents to invest in their children's educations," he said.

Frerichs' office also offers the Illinois ABLE program. A tax-advantaged investment program, ABLE provides persons with blindness or disabilities the option to save for disability-related expenses without putting their federal means tested benefits at risk.

Illinois ABLE Is a member of the National ABLE Alliance, a partnership of 14 states representing over one quarter of the population of the United States. The goal of the National ABLE Alliance is to provide the most robust ABLE services possible at the lowest cost to account owners.

ABLE is a federally tax-advantaged savings program that will allow for Illinois families and individuals to save for disability-related expenses. ABLE is similar to 529 College Savings programs, in that families would be allowed to set aside money for future qualified expenses, invest these funds in professionally designed savings accounts, and avoid some tax penalties on the fund.

ABLE allows for a wide range of expenses, as long as they are related to your blindness or disability, including expenses for education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, and expenses for oversight and monitoring, funeral and burial expenses.

Many Illinoisans are not saving enough for retirement, Frerichs said. So, early next year, the treasurer's office will launch the Secure Choice retirement program. It will offer state businesses with at least 25 employees, that have been in business for at least two and who do not currently provide a qualified savings plan the option to either offer a private market savings vehicle, or automatically enroll their employees into Secure Choice.

An estimated 1.2 million workers will gain access to employer-based retirement savings plans through Secure Choice. Individual accounts will be pooled and managed by a private investment company selected through a competitive bidding process.

Perhaps the best-known consumer program offered is iCash. The treasurer's office is holding $2.5 billion in unclaimed funds that belong to Illinoisans. The state holds these lost funds until they are claimed by either the original owner or their heirs.

Frerichs said individuals, organizations and businesses need only to go to to determine if they have money due them. One of every four people who check discover they cash coming from sources such as life insurance benefits and uncollected pay and interest. The average amount is $1,000.

Despite the state budget crisis, Frerichs' office paid out $155 million in iCash funds in 2015 and $159 million in 2016. His goal is to set a new record in payouts every year, returning the funds to circulation.

"That does a lot more good than having them sit in a Springfield bank account," he said.

Property is returned at no cost with the proper identification.

Frerichs' office also invests money on behalf of local units of government as well as the state.

The Illinois Funds is a Local Government Investment Pool invests cash for more than 2,200 local and state government agencies that have voluntarily participated since it was created in 1975.

The funds let government agencies use the Illinois State Treasurer's resources to safely invest their funds while enjoying the economies of scale available from a $4- to 6-billion pooled-fund investment portfolio.

The treasure's office also offers ePAY, a full-service electronic payment program specifically designed for government agencies in Illinois so they can quickly and securely receive monies through convenient, customized payment channels. More than 800 local and state government agencies, from cities and villages to schools and park districts, have adopted ePAY since it was created in 2002.

The treasure's office also offers ePAY, a full-service electronic payment program specifically designed for government agencies in Illinois so they can quickly and securely receive monies through convenient, customized payment channels. More than 800 local and state government agencies, from cities and villages to schools and park districts, have adopted ePAY since it was created in 2002.

Frerichs was born in Gifford and lives in Champaign with his young daughter, Ella. He graduated from Yale University and spent two years in Taiwan where he taught English to young students and learned to speak Chinese.

He returned to Champaign County and launched his own technology business. He served on the Champaign County Board and as county auditor before being elected state senator in 2006. He began efforts to make college more affordable while serving as chairman of the Higher Education Committee.

In Illinois, the treasurer's office predates the state's incorporation in 1818. Voters in 1848 chose to make it an elected office. Frerichs is the 74th person to serve in this role.

The office actively manages about $25 billion. The investment approach is cautious to ensure the preservation of principal.

The investment returns are significant: For every $1 spent to run the office, Frerichs nets $28 for the state's residents.

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