To be offered by businesses with more than 25 employees
The Illinois Secure Choice Retirement Savings Program, signed into law in January of 2015, requires that Illinois businesses automatically enroll their employees in the savings program if they have at least 25 employees, have been in business for at least two years, and do not provide a qualified retirement savings plan of their own (such as a 401k, SIMPLE IRA, pension or other retirement savings vehicle).
The mandatory law enables employees to save for retirement through payroll deductions into a Roth Individual Retirement Account (IRA) (after-tax). The default savings is 5% of gross pay, though it can be adjusted. Illinois is the first state to implement a retirement savings plan for employees of small businesses. It is a model for plans that other states are developing.
The requirement began November 1 for companies with 500 employees or more, and will begin July 1, 2019, for businesses with 100–499 employees, and November 1, 2019, for companies with 25–99 employees.
“Employers who do not offer a retirement program benefit for their employees should consider if it’s best to start offering their own retirement plan or simply implement the state program,” says Leslie Day, PPA’s Director of HR Consulting Services. “Retirement plans take a while to set up, so don’t wait until the last minute.”
Precision Payroll does not set up retirement plans for clients, but has a number of great partners to recommend. Your sales representative can assist you in setting up a meeting with a 401K professional to discuss your options. For more information about the savings program itself, visit the Illinois Secure Choice website at www.Ilsecurechoice.com.
Illinois is the first state to implement a retirement savings plan for employees of small businesses. It is a model for plans that other states are developing.