The Illinois Secure Choice Savings Program (Secure Choice) allows workers to save money for retirement on their own. This is required for any business in the state of Illinois that has at least five employees, has been in business for two or more years, and does not currently offer a retirement plan. Businesses who fall into this category must begin offering a qualified plan to their employees, or automatically enroll their employees into Secure Choice.
Program Overview
Participants of the Secure Choice Program are enrolled in a default target-date Roth IRA with a default five percent payroll contribution. However, participants can change their contribution level or fund option at any time or choose to opt-out of the program. Employers register their employees for this program so that accounts can be created, and payroll contributions can be made.
The Illinois Secure Choice Program differs from a traditional retirement plan. When enrolled in the Secure Choice Program, employers are not considered plan fiduciaries, they do not pay fees, they do not make contributions into their accounts, and they’re not responsible for plan paperwork or administration. Instead, the Secure Choice is run by a seven-person Board with Treasurer Michael Frerichs serving as Chair. Frerichs office administers Secure Choice on behalf of the Board, and then partners with private-sector financial service firms for a variety of services.
The Secure Choice Savings Program launched in 2018 with a phased implementation that’s based on employer size. The next phase in this program begins in November of 2022 for businesses that consist of 16-24 employees.
Employer Registration Deadlines
Depending on the size of the employer, program deadlines vary. The deadline for businesses with 16-24 employees is November 1st, 2022, and the deadline for 5-15 employees is November 1st, 2023. Any employer who does not meet their required deadline may be subject to enforcement which could consist of financial penalties. The Illinois Secure Choice Program has over 97,200 participants as of December 1st, 2021. Altogether, these participants have saved nearly $80 million for retirement.
Partner With A PEO Today!
Employers face a constant challenge today in retaining good talent. It’s more important than ever for employers to offer their employees a retirement plan, in order to attract good talent. The constant change in legislation adds strenuous time and energy to your business. When you partner with GMS, our experts help you navigate through these changes and assist in the process of enrolling your new employees. Do what you do best and outsource the rest!