Illinois
On January 4th 2015, Governor J.B. Pritzker (D) signed the Illinois Secure Choice Savings Program Act into law, which implemented a statewide retirement savings program for all private-sector employees in the state not currently enrolled in a retirement plan to electively participate in a state-facilitated automatic enrollment individual retirement account (IRA) program. On July 30, 2021, Governor Pritzker approved the Act’s expansion to include smaller employers.
Legislative Summary:
Senate Bill 2758 was originally proposed in January 2014 by Senator Daniel Biss (D) and was passed by the Senate in April 2014. In early December 2014 the House ratified it and it was signed into law in January 2015. Originally intended to be implemented by June 2017, a measure was later enacted that delayed its implementation until July 2018. In July 2021, the Act was amended to expand coverage to smaller employers.
Program Description:
The Illinois Secure Choice Savings Program is administered by the Illinois Secure Choice Savings Board, to provide a state-facilitated payroll-deduction individual retirement savings plan to private sector employees who do not have access to employer-sponsored retirement savings plans.
Affected Employers:
Employers with five (5+) or more employees, who have been in operation for more than two (2) years, and that have not offered a qualifying retirement plan in the last two years.
General Requirement:
Automatic enroll employees at 5% deferral with annual increases of 1% (up to a maximum of 10%) of the enrollee’s wages. Every affected employer must register and choose to opt-in or claim exemption.
Launch Status:
July 1, 2018
Full Implementation:
November 1, 2023
Compliance Deadline:
| Deadline | AFFECTED EMPLOYERS |
|---|---|
| November 1, 2022 | Employers with 15+ employees |
| November 1, 2023 | Employers with 5+ employees |
Non-Compliance Penalties:
$250 per employee/year for the first year of non-compliance & $500 per employee/year for every subsequent year the employer remains non-compliant.
Employer Costs:
N/A
Employee Costs:
0.75% annual fee on plan balance
Investments:
The program offers a suite of 11 target date funds (TDFs), as the default investment option, and additional investment options – including a capital preservation, growth, and conservative funds.