Illinois Secure Choice is a program established by the Illinois Secure Choice Savings Program Act. Since its launch in 2018, the law requires all Illinois employers that have 25 or more employees and have been in business for two or more years to either provide a retirement plan of their own or join the state’s retirement plan.
Employers enrolled in the state’s retirement program, Secure Choice, are required to withhold 5% of each employee’s compensation (up to the Roth IRA contributions limit, which is $6,000 for 2021), remitting the withholdings to the state’s Secure Choice plan. Employees have the option to adjust their contribution rate or opt out.
The program was phased in, based on an employer’s employee count. The first wave of employers to register with the program (those with 500 or more employees) was November 2018, while the deadline for employers with 100-499 employees was July 2019, and the final employer registration deadline for employers with 25-99 employees was November 2019.
Illinois employers that have failed to register for the Secure Choice program and don’t offer their own retirement plan should take note that the State of Illinois plans to step up enforcement of the program’s mandates next year. Employers that do not sponsor a company-sponsored retirement plan and have failed to enroll in Secure Choice face a penalty of $250 per employee for the first year and $500 per employee for each subsequent year.