Rauner Defends Move to Make Secure Choice Optional For Employers
State Treasurer Mike Frerichs had condemned the governor’s amendatory veto that will make the Illinois Secure Choice retirement savings plan optional for employers, if it’s upheld by lawmakers.
But Rauner said the program was an unfair burden on smaller businesses.
“By having a mandatory, forced retirement program managed by the state, forced on small business, it was making many of them struggle, many of them contemplate moving out of the state”, said Rauner “I think it was a mistake to put it in as a forced requirement.”
In addition, the Republican governor said requiring employers to implement Secure Choice would discourage them from offering their own retirement plans, “which is not the right answer for the long term.”
Secure Choice was passed and signed in the waning days of former Governor Pat Quinn’s administration, after Rauner had defeated Quinn in the 2014 gubernatorial election. The program is currently in its initial pilot phase, with its roll-out scheduled to begin in a series of “waves”, the first one in November. Once it’s fully implemented, Secure Choice will deduct retirement savings from the paychecks of workers at companies in business for at least two years, with work forces of 25 or more that don’t offer any other plan. Workers will have five percent of their paychecks automatically deducted into a default target date Roth IRA that they own and can transfer from job to job. Workers may change their contribution level or fund option, or opt out of Secure Choice altogether.
But Governor Rauner used his amendatory veto to change the word “shall” to “may” in key passages of a technical clean-up bill (HB 4923) to make implementation of Secure Choice voluntary, instead of mandatory, for employers.
State Treasurer Frerichs accused the governor of playing “political games” with the amendatory veto of a bill that had passed the General Assembly unanimously. He noted in an August 15 news release that Rauner, prior to his action this week, had signed three previous bills that made technical changes to the Secure Choice program, and had appointed four members of the program’s seven-person board.
“Governor Rauner had chosen to turn his back on 1.2 million Illinois residents who need Secure Choice to have a dignified retirement – in an effort to cozy up to business lobbyists in Springfield,” said Frerichs in a news release.
The Democratic treasurer expressed hope that the General Assembly would override Rauner’s amendatory veto of HB 4923. Frerich’s release quoted two sponsors of the original 2014 Secure Choice bill, State Senator Daniel Biss and Illinois House Majority Leader Barbara Flynn Currie (Frerichs, then a state senator, and treasurer–elect, was also a co-sponsor).
The release also quoted the original Secure Choice bill’s only Republican co-sponsor, State Representative David McSweeney, who said that “as a strong fiscal conservative,” he supports Secure Choice and believes it will “save Illinois taxpayers a lot of money in the long-term.”
When asked about the possibility of an override vote, Gov. Rauner replied, “What I do is take a stance that I believe is in the best interest of the people of Illinois for the long term, and we’ll see how that evolves.”