May 02, 2019
Illinois Secure Choice Savings Program Act requires action!
The Illinois Secure Choice Savings Program Act (Secure Choice) mandates non-exempt 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 5% 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 5% to another percentage that is subject to the annual Roth IRA contribution limits.
Administered by the Illinois State Treasurer’s Office, 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 first wave of employers required to comply with Secure Choice were 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 must register by Nov. 1, 2019.
Although current sponsors of a qualified retirement or simplified employee pension fund are exempt from Secure Choice, such exempt employers are nevertheless required to notify the state of their exemption by clicking here. Employers who have not registered should expect to receive a letter from the program directing them to do so.
If you would like assistance with adopting a retirement plan that will exempt you from Secure Choice or have general questions about the program, a Chuhak & Tecson Employment law attorney would be happy to assist you.
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