Illinois Governor Pat Quinn signed legislation establishing an individual retirement plan for private-sector employees who currently do not have access to a retirement plan at work.
Senate Bill 2758 establishes the Illinois Secure Choice Savings Program, an individual-account retirement savings option with a 3% automatic payroll deduction. Employers that do not already offer a retirement savings plan to workers, that have been in business for at least two years and employ 25 or more employees are required to participate. Employees can opt out of the program, or contribute more or less than the default 3% of salary.
The funds will be overseen by a seven-member Illinois Secure Choice Savings Board, which will select a private firm to manage the money.
“The program will provide workers an opportunity to secure a safe retirement and give more businesses the opportunity to offer a retirement savings program at no cost to the company. The program will be self-sustaining at no additional cost to the state with the exception of start-up administrative costs,” the Governor’s office said in a statement.
The new law is effective June 1, 2015, and implementation must be complete within two years.
A number of other states are considering similar programs (see “States Moving to Fill Private-Sector Retirement Plan Void”)