Illinois Secure Choice Registration Is Underway for Employers with at least 25 Employees
Starting Nov. 1, 2019, employers in Illinois with at least 25 employees must comply with the Illinois Secure Choice Savings Program Act (Secure Choice Program) or offer employees an employer-sponsored retirement plan. The Secure Choice Program requires employers to automatically withhold 5 percent of an employee’s compensation (up to the annual maximum allowed for IRA contributions each year as provided by the IRS), unless the employee selects a different amount, or opts out of the program entirely.
The Secure Choice Program initially rolled out a first wave in November 2018 for employers with more than 500 employees and a second wave in July 2019 for employers with more than 100 employees. The final wave for employers in Illinois with 25-99 employees is now active as well.
Employers who satisfy all of the following criteria are subject to the Secure Choice Program:
1. They have at least 25 employees, as reported to the Illinois Department of Employment Security (IDES) for unemployment insurance payments;
2. They have operated in the state of Illinois for at least two years; and
3. They do not offer a qualified retirement plan to any Illinois employees.
Employers who fail to comply with the Secure Choice Program may face an annual penalty of $250 per employee for the first year and $500 per employee for each subsequent year.
Full-time and part-time employees are eligible to participate in the Secure Choice Program. In addition, seasonal employees are eligible if they work for the employer for more than 60 days. An employer does not need to offer the program to full-time students in a work-study program. Employees can opt out at any time.
Role of Employers
Employers who participate in the Secure Choice Program serve a limited role as a facilitator. Employer’s may:
However, employers may not:
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