Workers at small businesses with between 5 and 15 employees are eligible for retirement plans, but their employers must sign up by November 1.
Employees can sign up for either the state-sponsored Illinois Secure Choice retirement program or with a private retirement plan. Secure Choice accounts, by default, are target-date Roth IRAs and are portable from job to job. Investments are held in a separate trust outside the Illinois Treasury and managed by professional investment managers.
The law Secure Choice program began in 2018 and was phased in by employer size, starting with companies of 500 or more employees and expanding to smaller enterprises each year thereafter. This year the final onboarding group, employers with five or more employees, have until Nov. 1, 2023 to enroll.
According to the Secretary of State’s office, more than 128,000 workers have set aside more than $132.7 million through Illinois Secure Choice. According to the AARP, businesses with fewer than 10 employees only have a 27% participation rate in retirement plans, but when payroll deductions are available, participation rates exceed 85%.
Businesses failing to offer access to Illinois Secure Choice or another retirement program could be penalized by the Illinois Department of Revenue. IDoR reports that about half of small employers are exempt from the requirement, primarily because they have been in business for fewer than two years.
Eligible employers can register or request an exemption at www.ilsecurechoice.com.
