Governor Quinn signs
Savings Program Bill
Kicks in June 2015
but 24-month timetable
No Match Required
The Secure Choice Savings Program Act will require many Illinois employers to offer employees participation in a savings program that will be run by the State. An “employer” under the new law, which takes effect June 1, 2015, is one that has had 25 or more employees during the previous calendar year (which as of the effective date would be 2014), been in business for at least two years, and has no 401(k) or other qualified retirement plan that it offers its workers.
The state program is formally called the Secure Choice Savings Program, which will establish a maintain a fund managing the savings inflows from employees who enroll. As the statute is implemented, which by statute has to happen within 24 months of June 1, 2015, the board duly appointed to run the Program will issue information packets to employers for them and for their employees. Included in the latter will be a disclosure form advising each employee that he:
· can enroll with a 3% pre-tax contribution from payroll
· opt out
· enroll with a different percentage pre-tax contribution
The principal obligation of employers is to disseminate the information and maintain records to show enrollment or opting out, and to report these actions to the State. As a practical matter enrollment may not proceed until 2016 or 2017.
Employers are not required to match or otherwise contribute funds to the Program.