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By: Rebecca K. Wohltman

The Illinois Secure Choice program began in 2018, though many Illinois employers are still unaware of its requirements.

Simplistically, Illinois Secure Choice requires most employers that do not sponsor a retirement plan to join Illinois Secure Choice. Initially, employers with 25 or more employees were required to join the program. Later this year, employers with as few as 5 employees will be required to join the program.

Beginning November 1, 2023, Illinois employers with 5 or more Illinois employees that have been in business more than 2 years and that do not offer an employer-sponsored retirement plan will be required to join the Illinois Secure Choice program. Employers who fail to do so may be subject to fines and penalties.

Unless employees opt out or change the default setup, a participating employer automatically enrolls its employees into Security Choice. The employee-participant is then enrolled in a target rate Roth IRA with a 5% payroll contribution. Employees can select a traditional IRA (instead of a Roth IRA), can change the contribution amount, and can opt out of the program completely.

Once an employer registers for Illinois Secure Choice and enters employee information to establish the employee’s account, the employer’s only other obligation is to pay the contribution amounts to the Illinois Secure Choice program.

The employer is not considered a plan fiduciary, does not pay any fees for the program, and is not responsible for administering the program. Employers essentially act as a conduit for the savings amounts, which is much easier for employers to manage than a traditional employer-sponsored retirement plan.

If you are an employer with 5 or more Illinois employees and you do not offer an employer-sponsored retirement plan, you should begin registering with Illinois Secure Choice. You will be required to participate in this program in just a few short months.

Professional Services Disclaimer: Please note that the information presented here is as an educational service, and while it contains information about legal issues, it is not legal advice. No warranty is made regarding the applicability of the information presented to a particular client situation, and the information set forth is not a substitute for original legal research, analysis and drafting for a particular client situation.