We are facing a national retirement savings crisis. Increasingly, older adults do not have enough savings to meet their basic needs in retirement, and younger adults do not have the money or the tools to build retirement savings. Here in Illinois, over 2.5 million workers in Illinois lack access to an employment-based retirement plan, an important tool to build wealth.
IABG led the campaign to address this crisis, and with the help of our partners, Illinois became the first state to enact Secure Choice legislation in 2015. This legislation creates a program that will automatically enroll workers at qualifying businesses in a retirement plan, and we are excited to see it come to life as it rolls out this year.
The Secure Choice pilot program is now underway, and individuals at a number of employers are now using it to build retirement savings! The pilot program began in the spring, and the first contributions were made last month.
Eight employers from varying industries are currently enrolled in the program, including a home health agency, staffing company, and a restaurant. The Illinois State Treasurer’s Office, who administers the program on behalf of the Secure Choice Board, is working with these employers to refine the enrollment process and make the program as simple and easy-to-use as possible for the full roll out in the fall.
How Secure Choice Works
Workers at qualifying businesses – businesses that have been operating for at least two years, employ 25 or more workers per year, and don’t already offer a qualified retirement savings option – will be automatically enrolled in the program. Workers can opt out of the program at any time.
Workers that choose to participate will save a portion of their paycheck into a Roth IRA through automatic deductions from their paycheck. Workers may choose an account type and determine their level of contribution. If workers choose the default option, they will contribute 5% of every paycheck to a target date life-cycle fund.
The first wave of enrollment, and the official launch of Secure Choice, will be in November 2018, with the largest employers enrolling in the program. Workers at these employers will see the first payroll deductions in January 2019. All eligible workers will be enrolled in Secure Choice by 2020.
Learn More and Spread the Word
With workers now being enrolled in Secure Choice, it is time to spread the word about this new retirement savings program so that workers and employers throughout Illinois can take part in this wealth building opportunity!
Learn more at the Secure Choice website, and use our fact sheets in English, Spanish, Polish, Arabic, Chinese, and Tagalog to raise awareness in your community and equip workers with the information they need about the program.
We’ll soon be announcing two webinars about Secure Choice, so sign up for our e-news to get the details!