The State of Illinois is rolling out a new retirement savings program called Illinois Secure Choice. This program is for employers that do not already offer a savings plan and it is intended to help employees save their own money for retirement through payroll deductions.
Accounts are owned by individual participants and will be portable from job-to-job. An estimated 1.2 million workers will gain access to employer-based retirement savings plans through Secure Choice. Individual accounts will be pooled and managed by a private investment company selected through a competitive bidding process.
HOW IS THIS NEW PROGRAM BEING ROLLED OUT?
The State of Illinois is rolling this program out in three waves.
1. Employers with 500 or more employees will be sent a notification to register by November 1, 2018 either via email or paper notice depending on how they setup their communication preferences.
2. Employers with 100 to 499 employees will be sent a notification to register by July 1, 2019 either via email or paper notice depending on how they setup their communication preferences.
3. Employers with 25 to 99 employees will be sent a notification to register by November 1, 2019 either via email or paper notice depending on how they setup their communication preferences.
NOTE: All employers with 25 or more employees can voluntarily register at any time to participate in the program prior to the mandatory registration wave.
WHICH EMPLOYERS ARE REQUIRED TO REGISTER?
For the initial rollout please see the above question. The basic registration requirements of the program for Illinois employers with workers in Illinois are:
• have at least 25 employees,
• have been in business for two or more years, and
• do not currently provide a qualified savings plan.
WHAT DO EMPLOYEES NEED TO KNOW?
Important Employee Information
• Their Illinois Secure Choice account is a Roth IRA
• The default savings rate is 5% of gross pay, but they can choose to change their contribution level or fund option at any time
• Employees will be auto-enrolled after 30 days and will begin saving through payroll contributions
• They can opt out at any time
WHAT DOES THE EMPLOYER NEED TO DO IF A LETTER IS RECEIVED OR IF THE EMPLOYER HAS QUESTIONS?
Contact Illinois Secure Choice one of three ways: by visiting their website here: https://employer.ilsecurechoice.com/, sending them an email at firstname.lastname@example.org or by phone at 855-650-6913.
HOW TO GET STARTED
Contact your Account Manager and inquire about setting up a state sponsored retirement savings program. Paylocity will partner with the vendor to setup this integration allowing the required data exchange in support of administering the plan.
Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity Account Manager.
This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.