Jan 10, 2019
The Illinois Secure Choice Savings Program Act is now effective
Having survived both federal legislation which removed Department of Labor protection and a veto by Governor Bruce Rauner, the Illinois Secure Choice Savings Program Act (Secure Choice) became effective for certain Illinois employers on Nov. 1, 2018.
Secure Choice mandates certain employers to enroll both full- and part-time employees, who are 18 and older, in a state-sponsored Roth IRA savings plan. Unless an employee opts out within a specified period, the employer is required by law to deduct five percent of the employee’s gross pay and remit it to the Secure Choice program within seven business days of the deduction. Each employee may change the default deferral percentage of five percent to another percentage that is subject to the annual Roth IRA contribution limits.
Secure Choice applies to both profit and nonprofit Illinois businesses that employ at least 25 employees, have been in business for at least two years and do not currently provide a qualified retirement plan. State and municipal employers are exempt. The Illinois State Treasurer’s Office is overseeing the implementation and administration of Secure Choice.
The first wave of employers required to comply with Secure Choice are those who employ 500 or more employees. These employers were required to register with the state by Nov. 1, 2018. Employers with 100 to 499 employees must register by July 1, 2019 and employers with 25 to 99 employees need to be registered by Nov. 1, 2019.
Employers can access the Illinois Secure Choice Retirement Savings Program website to find helpful, detailed information along with the necessary forms.
For assistance interpreting or implementing the Secure Choice Program or the above handbook, contact a Chuhak & Tecson Employment Law attorney.
This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.
Client alert authored by: Patricia Cadagin O'Brien, Principal
This alert originally appeared in the January 2019 Employment Focus newsletter.