Illinois Secure Choice

The Illinois Secure Choice Savings Program, signed into law January 2015, helps small businesses that struggle to offer retirement savings opportunities to their employees and provides retirement security to the 2.5 million Illinoisans who do not have access to an employment-based retirement plan. Below is an overview of what small businesses need to know about the program.

What is the Illinois Secure Choice Savings Program?

  • The Illinois Secure Choice Savings Program automatically enrolls employees into a retirement savings program. Employees may opt out at any time.
  • Once enrolled, workers contribute a portion of their income (default rate = 5%) into an investment fund managed by a private company and overseen by the Illinois Secure Choice Savings Board.
  • Workers are allowed to opt out or change their investment contributions, and the fund is entirely employee-funded. 

How the law impacts employers?

  • Employers do not contribute to funds, pay fees, manage funds or have any responsibility for providing financial advice. Employers must communicate that employees have the option to opt out of the program and use their existing payroll system to send employees’ contributions to the fund each month.
  • Small Business Majority’s scientific polling found the majority of Illinois small business owners supported legislation establishing the Secure Choice Savings Program.
  • Many small businesses would like to offer retirement plans to their employees—to help attract a talented workforce and boost employee morale—but can’t afford the overhead and administrative costs. The Secure Choice Savings Program provides a way for small businesses to offer their employees access to a retirement savings program without incurring the associated burdens of employer- sponsored retirement programs.
  • Nearly 80% of those who work for small businesses do not have access to a retirement savings option at work; meanwhile, the small business market is not being adequately served by the financial services industry. The Secure Choice Savings Program helps serve an underserved population that wants to save for retirement. 

What businesses qualify for the program?

The program currently applies to businesses that meet at least one of the following criteria:

  • Have 5 or more eligible employees;
  • And currently do not offer a qualified retirement plans, such as

    • 401(a) Qualified Plan (including profit-sharing plans and defined benefit plans)

    • 401(k) plans (including multiple employer plans or pooled employer plans)

    • 403(a) Qualified Annuity Plan or 403(b) Tax-Sheltered Annuity Plan

    • 408(k) Simplified Employee Pension (SEP) plans

    • 408(p) Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA Plan

    • 457(b) Governmental tax-deferred compensation plan or Taft-Hartley plan

Program deadline

  • For businesses with more than 25 employees, the deadline to apply has passed. However, be sure to register now to avoid penalties.

  • For businesses with 16-25 employees, registration is now open. To avoid penalties, you must register by November 1, 2022. 

  • For businesses with 5-15 employees, registration is now open. To avoid penalties, you must register by November 1, 2023.

Where can I find more information?