Quinn
Gov. Pat Quinn on Sunday signed legislation to create the Illinois Secure Choice Savings Program.
The program establishes the option of an individual retirement plan for more than 2 million Illinois private sector employees who do not have access to any retirement plan at work.
“For many people across Illinois, retirement planning is often a matter of too little, too late,” Quinn said. “Without an adequate retirement savings plan, many people are forced to spend their later years scraping to get by with just Social Security. This legislation protects millions of private sector employees in Illinois who work hard but do not have the option of a retirement plan through their employer.”
Senate Bill 2758 establishes the Illinois Secure Choice Savings Program. The program creates a simple individual retirement savings option through a 3 percent payroll deduction for private sector employees whose employer does not offer a retirement plan besides Social Security. Employers 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 percent.
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 state will not have access to the funds as the investments are pooled as private property of the workers outside of the state treasury.
The Sargent Shriver Center on Poverty Law, the Illinois Asset Building Group and the Woodstock Institute report that 2.5 million people in Illinois lack access to a retirement plan. Without proper retirement savings, retirees are often forced to rely on Social Security when they can no longer work. The savings from Social Security are often not adequate to sustain families, often forcing retirees into a dependent lifestyle.
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 new law is effective June 1 and implementation must be complete within two years.