- Aug 19, 2019
Illinois employers with 25 or more employees are now required to either offer a retirement plan or register employees with a new state-managed plan. Implementation of the Illinois Secure Choice Savings Program Act has taken place in three stages: companies over 500 employees began registering staff members in November 2018, followed by employers with 100-499 in July 2019 and those with 25-99 in November 2019. While the law is intended to require few resources from employers, it is important to understand employers’ responsibilities as well as options available to employees.
The law established the Secure Choice retirement savings program, for which a default amount of 5% of an employee’s gross pay is deducted and invested by the state in a Roth IRA for the employee. Eligible employees include full-time and part-time workers over the age of 18 who work within Illinois. Seasonal employees are also covered if they work more than 60 days for the employer.
Employers act as facilitators of the program by registering each eligible employee with the state and transferring the deducted funds to the state-run account. Deductions must begin 30 days after the employee is registered and must be received by the state within seven days.
Employees have the ability to adjust the amount of deductions or to opt-out of the program entirely. Once an account is established, it moves with the employee from job to job. Each employee’s account is managed through the program’s website, www.ilsecurechoice.com, and is outside the employer’s control.
In essence, the law is intended to encourage retirement savings by workers without placing a financial burden on employers. However, management should expect that employees will turn to them with questions about the deductions being made from paychecks.
Employment law attorney Susan Troester, LaPointe Law, encourages employers to be proactive as the requirements are being implemented. “First of all, if you already offer an employer-sponsored retirement savings plan to your employees, you need not participate in the program. If you do not presently offer a retirement plan, consider doing so,” says Troester. “If you elect not to offer your own plan, Secure Choice will contact you to register your business. In the meantime, I recommend visiting the Employer page of the Secure Choice website. You will find all of the forms you need to provide to your employees, as well as employer-focused information about the program.”
Questions can be directed to the Secure Choice Client Services Team at (855) 650-6914 or email@example.com.