Like programs in many other states, the Illinois Secure Choice Program mandates all employers to register with the Illinois Secure Choice Program that provides a retirement savings plan to employees without one. Employers must register and participate or claim an exemption, provide and update an employee roster, inform employees of the program, and for employees that do not opt out, deduct a percentage of their compensation and remit it to the Program Administrator. The Illinois plan acts like an IRA with restrictions and limitations for employees that do not opt-out.

Some key facts regarding the Illinois Secure Choice include:

  • Obligated Employers.  All employers that have been in business for two years and have five or more employees must register through the Secure Choice Employer Portal and either participate or claim an exemption, such as having a qualified retirement plan for its employees.
  • Employer Obligations. Register, distribute the forms and information to employees, collect and remit employee contributions (either 5% of compensation or as employee directs) within 7 days, and update the roster with new hires and terminations within 30 days.
  • No Fiduciary Duty.  Although obligated to timely remit employee contributions, Employers are not considered plan managers or fiduciaries and are prohibited from making contributions to the employee accounts.
  • Employee Obligations.  After the employer submits the roster, employees will be sent an invitation to set up their account, with 30 days to customize their account or opt-out. If they do not take action after 30 days, they will be automatically enrolled in Illinois Secure Choice with a default contribution rate of 5% of their compensation. Employees can opt-out at any time, even after they are automatically enrolled.

Illinois, like other states, will soon require your acknowledgement of compliance with Secure Choice when renewing your entity status annually, and can impose a fine of $250.00 per employee for non-compliance. Your accountant or payroll service provider should be able to address this requirement, and further information is available at ilsecurechoice.com.

Should you have any questions or issues please contact us so we can assist you or refer you to an appropriate professional.

This Brief is designed to provide our friends and clients with information regarding the various subject matters covered, it is not designed to take place of legal, accounting, or other professional advice.  If expert assistance is required, the services of a competent professional should be sought. This memorandum may constitute advertising under the rules regulating Illinois attorneys