The Illinois Secure Choice Savings Program Act (820 ILCS 80/1) is set to roll out on November 1. Are you ready? The Act requires private sector employers who have more than 25 employees and who have been operating in Illinois for at least two years to participate in the Illinois Secure Choice program or another qualified retirement plan. Other qualified retirement plans include 401(k) plans, Simple IRAs, and SEP-IRA plans, among others.
Employers who are required to participate in the Secure Choice program must withhold 5% of an employee’s compensation from his or her paycheck unless the employee opts out of the program or requests a different amount to be withheld. Employers then remit the amount withheld to the state-run program. Employers are not permitted to make any contributions. The program is administered by a seven-person board, which contracts out the administration of the fund to a third-party. The Secure Choice savings plan is a Roth IRA. The default investment option is a target date index fund, but participants in the program can choose between a number of different options.
The Act requires employers to distribute informational materials about the program to all employees. These program materials should be provided to employers by someone from the program, but if employers have not received the materials, they may want to contact the Treasurer’s Department, who administers the program (You can do so online by clicking here or by calling: (312) 814-8955).
Employers who are required to participate in the program but who do not do so may be subject to fines and penalties. The Secure Choice program is separate from the Illinois pension system, and is designed to give private-sector employees IRAs that they can manage. Employers with fewer than 25 employees who would like to participate will likely be able to do so after the program finishes rolling out in 2019.
Starting on November 1, employers with more than 500 employees and who are required to enroll in the program must begin enrolling employees. In July 2019, employers with 100-499 employees must begin enrolling employees, and in November 2019, employers with 25-99 employees must begin enrolling. Employers can enroll employees by visiting www.ilsecurechoice.com.
Feel free to contact me by email at email@example.com or by phone: (312) 604-9125) if you have any questions about the Secure Choice program or would like help enrolling.