Illinois Secure Choice Savings Program Act
To improve the retirement savings of Illinois workers, the Illinois State Treasurer’s Office has created the Illinois Secure Choice Savings Program Act (Secure Choice) set to be implemented by July 1, 2017. The act requires Illinois businesses with at least 25 employees, who have been in business for two or more years, and do not offer a qualifying savings program the choice to either:
- Begin offering a qualified retirement savings plan* or
- Automatically enroll their employees in Secure Choice
* – Qualified savings plans include:
- Money Purchase Plans
- 401k Retirement Plans
- Employer Sponsored Annuity-Based Retirement Plans
- 403(b) Tax Sheltered Annuity Plans
- SEP IRAs
- SIMPLE IRAs
- 457(b) Nonqualified, Tax Advantages Deferred-Compensation Retirement Plans
Highlights of the Illinois Secure Choice Savings Program include:
- Participants will have 3% of their pay automatically deducted into a target date Roth IRA, but have the option to change their deduction amount, fund option, or could opt out of the program entirely.
- The program is state-run, which means participating employers are not responsible for its administration or investments.
- It does not require or allow employer matches or contributions.
- Penalties for noncompliance begin at $250 per employee per year initially, and increase to $500 per employee if the employer continues to be in violation.
Please feel free to contact us with any questions regarding this program.