State Treasurer Hails Million Dollar Mark For Workplace Retirement Savings Program
One million dollars --- that’s how much the Illinois treasurer’s office says about 9,000 private-sector employees have set aside so far, through Illinois’ new Secure Choice auto-enroll workplace retirement program.
The state is in the process of registering private employers for the implementation of Secure Choice. The treasurer's office says nearly 100 businesses that did not have retirement programs of their own joined the program through the first wave of signups, which ended last November. That month was also the deadline for the largest employers to register, those with 500 or more employees. However, any employer with 24 or more workers can register with Secure Choice at any time.
Secure Choice's second wave of employer registration is now underway, with a July deadline set for employers with 100 to 499 workers. Employers with 25 to 99 employees must register by this coming November.
Secure Choice automatically deducts 5 percent from employee paychecks into a Roth IRA, unless employees opt out or change the amount.
A growing number of states offer various types retirement savings programs for private-sector workers who don’t have access to one. Illinois is joining those states, including California, Maryland and Oregon, which automatically enroll employees in IRA programs.
State Treasurer Mike Frerichs says he expects Secure Choice will cover 1.2 million workers by the time it's completely rolled out. He says providing retirement programs through the workplace is an effective way of getting more people to save for retirement.
“Just about half of private sector employees don’t have access to a workplace retirement savings option,” said Frerichs. “And that’s Important, because the AARP did a study that showed that if a person has a workplace saving option, they’re 15 times more likely to be saving for their retirement than someone who doesn’t.”
Frerichs says some employers have been initially skeptical of the Secure Choice program.
“But when they discovered that it didn’t cost them any money, that there was no legal liability to them, and that their employees were happy that they were able to save for their retirement, they’ve been some of our best converts,” said Frerichs.
Last summer, then-governor Bruce Rauner tried to make Secure Choice optional for employers through an amendatory veto of a technical cleanup bill. Lawmakers did not accept the changes. Frerichs says he expects lawmakers to pass the cleanup bill again this year, and that Governor Pritzker will sign it, with no changes.