Illinois business owners, listen up! Did you know that if you are a small business owner in the State of Illinois and you have over 25 employees, your deadline to meet the state’s retirement requirements was over two years ago on November 1st, 2019? If you have between 15-24 employees, your deadline is quickly approaching on November 1st, 2022. And, for those with 5 or more employees, you’ll need to be compliant by next year.
What does this mean? It means that, after those dates, you will be legally required to offer retirement account options to your employees. If you don’t, you risk paying a fine per employee until you are compliant. Yikes. Sounds like a lot of work and money on your part, right? It doesn’t have to be, actually!
The State of Illinois has set up the Illinois Secure Choice Program as a free, accessible option for small business owners who don’t currently offer any retirement plan options to their employees. However, that doesn’t make it the best or the easiest option in the long-run. Here’s what to know about the Illinois Secure Choice Program, along with another better alternative.
The Illinois Secure Choice Program is a state-run retirement program offered to businesses throughout the state in order to comply with the new Illinois Secure Choice Savings Program Act (820 ILCS 80/). Basically, it’s a free, accessible program offered to small business owners who don’t currently offer any retirement plan options to their employees. While the program is free for employers, there is an administration fee for employees.
Absolutely, yes! While we know that, for small business owners, it can seem like just another costly task added to your laundry list of things to do, it’s actually extremely necessary and quite beneficial to both your employees and, in the long run, for you.
The Illinois Secure Choice Program is similar to other implemented programs around the country, such as CalSavers in California. And, they’re all based on the same idea: every worker deserves a chance to retire in dignity after a lifetime of work.
When a study was performed in California, researchers at Berkeley found that three-quarters of low-income workers and half of middle-income workers had no dedicated retirement assets. Those numbers were even more worrisome for minorities. According to the study, 7 out of 10 Latinos had no access to a workplace retirement plan.
If you opt to participate in the Illinois Secure Choice Program, you sign up via their website and enter information about your business and your employees. Once you enter the information, they send you the documents you need to send to your employees, who will be automatically enrolled at a default savings rate of 5% of gross pay.
Nobody, technically! While certain businesses are required to offer some sort of retirement plan option to their employees, it doesn’t necessarily have to be through the Illinois Secure Choice Program. Who is required to offer retirement options?
If you have over 25 employees, your deadline to meet the new Illinois State retirement requirements was November 1st, 2019. For employers with between 15-24 employees, your deadline is November 1st, 2022. Those with between 5-14 employees will need to be compliant by November 1st, 2023. However, you’re eligible to register before that date (and you probably should, if not in the Secure Choice Program, at least in another retirement program like Wealth Stack).
It can be, but the Wealth Stack Growth Pack is better. Why? As mentioned above, the Illinois Secure Choice Board oversees these accounts. But, just who is on the Illinois Secure Choice Board?
Really, at the time of this writing, it appears to just be the State Treasurer and someone from the office of the State Comptroller’s Office. While they do have an administrator who has “experience in IRAs and record keeping,” there isn’t currently one person on the board with expert experience in managing large portfolios in a way that can help them grow exponentially over time.
What’s an alternative to the Illinois Secure Choice Program? Offering your employees an IRA plan that is being personally overseen by an expert investment professional.
The Wealth Stack Growth Pack offers just that, along with:
Click here to learn more about the program and to receive a free quote for your business.