FAQ

Top Questions

Can my company join the program before its required registration date?

Yes. Required registration dates are ‘comply by’ dates. At a-soon-to-be-determined date, employers may initiate contact with Illinois Secure Choice to begin facilitating the program or to certify their exemption. There may be some restrictions on employers who do not wish to use the Illinois Secure Choice website or other forms of electronic submission.

What is the difference between registration and enrollment?

During the registration process, you provide basic information about your business to determine if you must facilitate the Illinois Secure Choice program. If you are required to facilitate, you will complete an enrollment process where you will verify or provide a limited amount of additional information about your participating employees and complete the process.

How long will the enrollment process take to complete online?

The amount of time to complete the employee enrollment process will vary, depending on how many employees you have and whether you enter them in one at a time or by bulk upload using an electronic format provided by the program. Initial enrollment may take as little as a few minutes but can take longer if you are entering large numbers of employees one at a time.

What counts as an employer-sponsored retirement plan?

An employer-sponsored retirement plan includes a plan qualified under Internal Revenue Code sections 401(a) (including a 401(k) plan), qualified annuity plan under section 403(a), tax-sheltered annuity plan under section 403(b), Simplified Employee Pension plan under section 408(k), a SIMPLE IRA plan under section 408(p) or governmental deferred compensation plan under section 457(b). It does not include payroll deduction IRAs.

Is there a penalty for businesses for failing to comply with the mandate?

Yes. Any business with employees in Illinois that doesn’t offer an employer-sponsored retirement plan will be required to facilitate the Illinois Secure Choice program for its employees. The goal is to make the process simple, clear, and easy. During each employer registration phase, the Illinois Secure Choice program will monitor compliance, reach out to employers, and provide technical assistance to help them meet deadlines and requirements. Employers who do not comply with the Illinois Secure Choice Savings Program Act may be subject to fines and penalties as described in 820 ILCS 80/85.

Is there a fee for employers?

No. There are no employer fees, and employers are not required to contribute to the program.

How is this program different from other plans like a 401(k) or an IRA?

Illinois Secure Choice is designed to combine some of the best features of employer plans and IRAs, making it easier to save by lowering the barriers that often keep people from saving. For example, to start an IRA on your own, you have to proactively seek it out. This program, however, allows you to save at work into a program managed on your behalf. Enrollment is automatic, and contributions are made through payroll deductions. The program is also portable and can move with you from one job to the next. Research shows that people are 15 times more likely to save if they have an option at work, but many small employers don’t have the time or resources to offer their own plan.1 This program allows employers to offer something meaningful to their employees without any fees or fiduciary responsibility.

Are there any exemptions from registration for certain industries?

Employers who have fewer than 25 employees, have been in business for less than two years, or who already offer an employer-sponsored retirement plan are exempt from facilitating the program.

Are seasonal employees eligible?

Yes, if they work for an employer for more than 60 days, which is the window for employers to enroll new hires in the program. If they work for less than 60 days, the employer will not need to enroll them.

What sort of materials will be provided to my employees about the program?

The materials provided by Illinois Secure Choice will be simple and explain what the program is, what choices employees have, and where they can go to get more information and answers to any questions they have. Employees will be able to opt out or make elections online, by phone, by mail, or by using a simple paper form available online or through client services at (855) 650-6914.

Employer Registration

Are there any exemptions from registration for certain industries?

Employers who have fewer than 25 employees, have been in business for less than two years, or who already offer an employer-sponsored retirement plan are exempt from facilitating the program.

Can I have a designee, such as my payroll services provider, complete my registration and enrollment process?

Yes you can have a designee. An authorized representative of the employer will need to complete the registration process. The authorized representative can then add employees or representatives from an external non-payroll vendor as delegates to help facilitate the program. Representatives from your external payroll provider can be added as payroll representatives to assist as well.

Can my company join the program before its required registration date?

Yes. Required registration dates are ‘comply by’ dates. At a-soon-to-be-determined date, employers may initiate contact with Illinois Secure Choice to begin facilitating the program or to indicate their exemption. There may be some restrictions on employers who do not wish to use the Illinois Secure Choice website or other forms of electronic submission.

What is the timeline for implementation?

The registration deadlines for employers are scheduled as follows - 

  • An employer employing 500 or more employees: 11/1/2018
  • An employer employing 100 to 499 employees: 7/1/2019
  • An employer employing 25 to 99 employees: 11/1/2019

The State will notify employers directly when they will be required to register or indicate that they are exempt from the program. This notice will include instructions and due dates.

How will I know when I have to register for the program and enroll my employees?

Yes. Any business with employees in Illinois that doesn’t offer an employer-sponsored retirement plan will be required to facilitate the Illinois Secure Choice program for its employees. The goal is to make the process simple, clear, and easy. During each employer registration phase, the Illinois Secure Choice program will monitor compliance, reach out to employers, and provide technical assistance to help them meet deadlines and requirements. Employers who do not comply with the Illinois Secure Choice Savings Program Act may be subject to fines and penalties as described in 820 ILCS 80/85.

Is there a penalty for businesses for failing to comply with the mandate?

Yes. Any business with employees in Illinois that doesn’t offer an employer-sponsored retirement plan will be required to facilitate the Illinois Secure Choice program for its employees. The goal is to make the process simple, clear, and easy. During each employer registration phase, the Illinois Secure Choice program will monitor compliance, reach out to employers, and provide technical assistance to help them meet deadlines and requirements. Employers who do not comply with the Illinois Secure Choice Savings Program Act may be subject to fines and penalties as described in 820 ILCS 80/85.

What counts as an employer-sponsored retirement plan?

An employer-sponsored retirement plan includes a plan qualified under Internal Revenue Code sections 401(a) (including a 401(k) plan), qualified annuity plan under section 403(a), tax-sheltered annuity plan under section 403(b), Simplified Employee Pension plan under section 408(k), a SIMPLE IRA plan under section 408(p) or governmental deferred compensation plan under section 457(b). It does not include payroll deduction IRAs.

What is the difference between registration and enrollment?

During the registration process, you provide basic information about your business to determine if you must facilitate the Illinois Secure Choice program. If you are required to facilitate, you will complete an enrollment process where you will verify or provide a limited amount of additional information about your participating employees and complete the process.

What's the benefit of facilitating the Illinois Secure Choice program?

It can be challenging for a small business to offer an employer-sponsored retirement plan, and many don’t. Employers tell us this program lets them provide retirement savings to their employees in a manageable way. Illinois Secure Choice helps small businesses attract and retain good employees—with zero employer fees. Employers simply pass information along to employees and handle payroll deductions. Through Illinois Secure Choice, employers can help their employees take responsibility for their own financial futures.

Contributions

Can employers match employee contributions?

No, Illinois Secure Choice does not allow employer contributions. The employer's role is limited to simply facilitating the program for employees.

Is there a mandatory employer contribution?

No, Illinois Secure Choice does not allow employer contributions.

Is there a penalty for remitting payroll deductions late or not at all?

Yes, failure to timely remit deductions violates Illinois law, including wage and hour requirements. The State may impose penalties for deduction violations.

Eligibility

Are H-2A visa holders eligible for the program?

Yes, however, they will only be enrolled and have an account created for them if they work for more than 60 days and if enough verifiable information is available to create an account in their name. If the program is unable to verify their information, their account will not be established.

Are my employees who live in other states eligible for Illinois's program?

Yes, if their employment is based in Illinois.

Are seasonal employees eligible?

Yes, if they work for an employer for more than 60 days, which is the window for employers to enroll new hires in the program. If they work for less than 60 days, the employer will not need to enroll them.

Are workers of only certain immigration statuses eligible for the program? What about undocumented workers?

Workers must have a verifiable individual tax identification number (ITIN) or Social Security number (SSN) to participate in the program. If a worker's information cannot be verified, the worker will not be enrolled and an account will not be established for them.

Can employees who participate in my employer-sponsored retirement plan also participate in the Illinois Secure Choice program?

Not at this time. However, the State is considering how to provide this option for employees while keeping facilitation of the program simple for employers.

Can I offer the Illinois Secure Choice program to employees who are in the waiting period for my employer-sponsored retirement plan?

Not at this time. At a future date, the State would like to allow employees to join the State's program if they aren’t eligible for their employer-sponsored retirement plan; however the State is still in the process of determining how that will work. The State wants to make sure that process is as easy as possible for both employers and workers.

Do family members who work for my business count as employees?

Yes, if they are considered employees for tax purposes.

Do I need to facilitate the program if I only have one or a couple of employees?

Employers with fewer than 25 employees are exempt and do not need to participate in the Program.

Do I need to facilitate the Illinois Secure Choice program for employees who are in the waiting period for my employer-sponsored retirement plan?

No. If you offer an employer-sponsored retirement plan, you will not need to facilitate the Illinois Secure Choice program at this time.

Do I need to offer the program to work-study students?

No. You do not need to facilitate the program for full-time students in work-study programs.

Do payroll deduction IRAs count as an employer-sponsored retirement plan?

No. Payroll deduction IRAs are not qualified retirement plans as defined by either federal or Illinois state statutes.

If a business owner or shareholder is also an employee of the business, are they eligible to participate?

Yes. Business owners or shareholders can participate if they are considered employees for tax purposes.

If I have a minimum age requirement for employees to join my employer-sponsored retirement plan, do I need to facilitate the Illinois Secure Choice program for employees who are younger than that age limit?

No. If you offer an employer-sponsored retirement plan to any of your employees, you will not need to facilitate Illinois Secure Choice.

If I have employees in multiple states, including Illinois, do I just facilitate the Illinois Secure Choice program for those employees earning income in Illinois?

No. If you offer an employer-sponsored retirement plan to any of your employees, you will file a certificate of exemption and you will not need to facilitate the State's program.

If I only offer my employer-sponsored retirement plan to some employees but not all, do I have to offer the Illinois Secure Choice program as well?

No. If you offer an employer-sponsored retirement plan to any of your employees, you will not need to facilitate the State's program.

Is it mandatory that employers facilitate Illinois Secure Choice if they don't offer an employer-sponsored retirement plan?

Yes, any business that has been in business for more than 2 years with 25 or more employees in Illinois will need to facilitate the Illinois Secure Choice program for its employees. Illinois is in the process of considering appropriate enforcement actions should such actions be needed to enforce the mandate.

What is the definition of an employee and employer for the program?

“Employee” means any individual who is 18 years of age or older, is employed by an Employer, and who has Wages that are allocable to Illinois during a calendar year under the provisions of Section 304(a) (2)(B) of the Illinois Income Tax Act. An Employee includes both part-time and full-time employees.

“Employer” means a person or entity engaged in a business, industry, profession, trade, or other enterprise in Illinois, whether for profit or not for profit, that (i) has at no time during the previous calendar year employed fewer than 25 employees in Illinois, (ii) has been in business at least 2 years, and (iii) has not offered a Qualified Plan in the preceding 2 years.

Who will be responsible for determining if employees meet income limits?

Employees are responsible for determining if they meet income limits and are not eligible to contribute to Roth IRA accounts. Program materials will include information on income limits to help employees give consideration to whether and how they can participate in the program.

Enrollment Process

Are accounts tracked based on ID number or name?

Accounts will be tracked based on tax ID number or Social Security number.

Are employee signatures needed to enroll employees, open their accounts, and start making payroll deductions?

No. Employee signatures are not required to open employee accounts or to start making payroll deductions. A signature is necessary to make certain changes to accounts such as naming beneficiaries, changing contribution rates, changing investments, or taking withdrawals.

How does the enrollment process work?

You need to provide the program with certain information about your business and employees. That information can be provided online, with a manual option available for employers who are not internet-enabled. Illinois Secure Choice will only ask for the basic information necessary to set you up as an employer and to set up your employees' accounts. The program will then provide you with information to pass along to your employees. Your employees will have 30 days to opt out or make adjustments to their savings rates or investment choices. At the end of the 30 day period, you will record their choices in your employer account through the employer portal. You will then begin payroll deductions for participating employees.

How long will the enrollment process take to complete online?

The amount of time to complete the employee enrollment process will vary, depending on how many employees you have and whether you enter them in one at a time or by bulk upload using an electronic format provided by the program. Initial enrollment may take as little as a few minutes but can take longer if you are entering large numbers of employees one at a time.

How will the Illinois Secure Choice program provide me with informational materials for my employees?

Illinois Secure Choice will make materials available online. Employers can provide materials electronically to their employees or print them out. If employers provide email addresses for their employees, the program can provide the materials directly to the employees on behalf of the employer. Some printed materials may be made available to employees as well.

If an employee already has an account with the program through another employer, do I need to find the employee's account in the system?

No, you do not need to worry about identifying an existing account for an employee who tells you they already have one. You will simply provide basic information about the employee, and Illinois Secure Choice will use an employee's information to ensure new contributions go into the employee’s existing account.

What does it mean that employees are automatically enrolled?

Automatic enrollment means that following notification, employers will enroll eligible employees in Illinois Secure Choice unless employees have elected to opt out of the program.

What should I do if an employee asks me for advice about the program or investment options?

You should refer the employee to the program website or call center for questions about the program or their Illinois Secure Choice account. Employees should contact their financial advisors for investment advice.

What sort of materials do employees need to fill out?

Illinois Secure Choice will provide a simple form for employees to use to change their contribution elections or opt out of the program. Forms can be completed on paper, online, or by phone. Employees do not need to fill out any paperwork to be automatically enrolled. Employees are encouraged to claim their accounts online, so that they can have access to retirement-related tools and information, and more. Employees will also work directly with Illinois Secure Choice to change their investment and account-related elections. Employees can obtain the relevant paper forms by contacting client services at (855) 650-6914.

What sort of materials will be provided to my employees about the program?

The materials provided by Illinois Secure Choice will be simple and explain what the program is, what choices employees have, and where they can go to get more information and answers to any questions they have. Employees will be able to opt out or make elections online, by phone, by mail, or by using a simple paper form available online or through client services at (855) 650-6914.

What's the timeline for enrolling new employees?

Employers have 30 days from the date of hire to enroll a new employee in Illinois Secure Choice or accept their election to opt out of the program and 30 days before payroll deductions begin.

Will materials be available in multiple languages?

Illinois Secure Choice will provide some materials in a number of commonly used languages in Illinois in addition to English. Translation services will be available for a broader range of languages by phone.

Fees and Costs

How much time and effort is needed for employers to facilitate the Illinois Secure Choice program?

The initial registration and enrollment process is expected to take a few hours at most. The time needed to complete payroll deductions for the program should be comparable to the time needed to make other types of payroll deductions. There is no fee for employers to facilitate the program.

Is there a fee for employers?

No. There are no employer fees, and employers are not required to contribute to the program.

Does Illinois Secure Choice have a large employee staff?

The program has minimal staff. It is overseen by the Illinois Secure Choice and it is managed by a private, professional program administrator with extensive experience in investments and record keeping.

As an employer, who do I contact regarding the collection of fee if I do not register in the required time limit or do not take action?

You can email Client Services at clientservices@ilsecurechoice.com, or call (855) 650-6913, Monday – Friday, 8 a.m. – 8 p.m. CST.

General

Can employers cancel their employer-sponsored retirement plans and offer this instead?

The Illinois program isn't intended to replace employer-sponsored retirement plans, which have many important benefits. For example, 401(k) plans have higher employee contribution limits and allow for employer matching contributions, unlike Illinois Secure Choice.

Do any other states have programs like this?

California, Connecticut, Maryland, and Oregon have also passed legislation to create similar programs. Oregon has implemented a workplace program, OregonSaves. Many other states are also considering similar legislation.

Have programs like this been successfully implemented in the past?

Yes, a range of similar programs have been developed and used in a number of countries over the last two decades. These workplace-based programs are very popular with savers and are changing retirement outcomes in these countries. One program, called the National Employees Savings Trust (NEST), has been successfully implemented in the United Kingdom over the course of the last five years. New Zealand also has a similar program. The state of Oregon has recently implemented OregonSaves. The Illinois program is modeled after these plans as well as successful large employer plans.

How is this program different from other plans like a 401(k) or an IRA?

Illinois Secure Choice is designed to combine some of the best features of employer plans and IRAs, making it easier to save by lowering the barriers that often keep people from saving. For example, to start an IRA on your own, you have to proactively seek it out. This program, however, allows you to save at work into a program managed on your behalf. Enrollment is automatic, and contributions are made through payroll deductions. The program is also portable and can move with you from one job to the next. Research shows that people are 15 times more likely to save if they have an option at work, but many small employers don’t have the time or resources to offer their own plan.1 This program allows employers to offer something meaningful to their employees without any fees or fiduciary responsibility.

1AARP Institute of Public Policy

How knowledgeable are customer service representatives about the program?

Customer service representatives are fully trained in all aspects of the program. Staff include representatives with considerable training and expertise related to retirement plans.

Is Illinois the first state to implement a program like this?

Illinois will be one of the first states to implement this type of program. Oregon has recently implemented OregonSaves, and several other states are planning to implement similar programs soon.

Is the Illinois Secure Choice program considered an employer retirement plan?

No. Employers are only responsible for facilitating the program for employees.

Is this program meant to replace 401(k) plans?

No. This program is not meant to replace or compete with 401(k) or other qualified retirement plans – instead, it is meant to help employers who don't have the time, money, or resources to offer a 401(k) plan.

Is this related to the Illinois SERS?

No. This program is not related in any way to SERS. It is not a pension plan. It is for private sector employees to save their own money in their own individual accounts.

What does the State gain by providing this program?

More people saving for retirement will mean more self-reliance when people reach retirement age and less strain on social services.

What is the makeup of the Illinois Secure Choice Savings Board?

The IL Secure Choice Board has seven members: the Illinois State Treasurer, the Board Chair, a Designee for the Illinois State Comptroller’s Office, a Designee for the Governor's Office of Management and Budget, and three other appointees.

What was the legislation that created Illinois Secure Choice?

The Illinois Secure Choice Savings Program created by the Illinois Secure Choice Savings Program Act [820 ILCS 80].

Who do I contact if I have questions or need help or have an issue related to the program?

Information and resources are available online employer.ilsecurechoice.com, by email at clientservices@ilsecurechoice.com, and by phone at (855) 650-6913, where trained, knowledgeable account service professionals are available to help with any questions or assistance you might need.

Why is Illinois one of the first states to implement this type of program?

The retirement savings crisis is a serious problem here in Illinois and throughout the nation. There have been proposals to create a program like this at the national level to help address the crisis and make it easier for people to save. For now, a nationwide program seems unlikely, even though the crisis continues to grow. In response, most states have begun considering programs comparable to the Illinois program. In fact, several other states passed legislation to create similar programs. Oregon, for example, has recently implemented a workplace-based program called OregonSaves.

Why was this program created and what are the benefits?

As Illinoisans, we are not saving enough for retirement. Median retirement savings for all working-age families is only $2,5002, not enough to get through a single year of retirement, let alone 20 or 30. Approximately 50% of Social Security beneficiaries received at close to half of their total family income from Social Security and about one-quarter live in households that receive at least 90% of family income from Social Security.3 The legislature created Illinois Secure Choice to improve people’s access to and outcomes for retirement savings. The program is designed to lower barriers wherever possible, by using automatic enrollment and savings through payroll deductions to make it easier for people to save. Research shows that people are 15 times more likely to save if they have a savings option through work. This program helps fill a gap in the market that is not currently being filled4.

Eligible employees can always opt out if they don’t want to participate or if they want to save another way.

2The Continuing Retirement Savings Crisis: National Institute on Retirement Security, March 2015

3Social Security Bulletin, Vol 78, No.2

4AARP Public Policy Institute

Will services be available in other languages?

Yes, the call center will offer assistance in English and Spanish and will have access to translation services for other languages. Key materials will also be available in Spanish.

Will the State use people's money from this program to pay for other programs, like SERS?

No. Assets are remitted directly to Illinois Secure Choice on behalf of workers, and credited directly to IRA accounts in those workers' names. Accounts are not accessible to the State for other purposes and are not tied to any other retirement plans offered by the State, including SERS.

Will this program make information available to savers and include consumer protections?

Yes, this program will help ensure that Illinoisans have more choices, more information, and easier access to retirement savings accounts. Consumer protections are part of the program and may be enforced through state agency actions.

Investments

Does the program have an investment consultant?

Yes, the program has a private investment consultant that provides input and feedback about investments to the Board.

What is an age-based fund?

An age-based fund refers to a fund that targets a certain level of risk based on two factors: an investor’s current age and their approximate estimated retirement date. An age-based fund evolves its mix of investments—stock, bond, and cash equivalents—over time to seek growth for younger investors and to help preserve savings as investors near retirement age. Illinois Secure Choice Target Retirement Funds are a type of age-based funds.

Who is responsible for deciding what investment options to offer to participants?

The Illinois Secure Choice Savings Board is responsible for making decisions about the investments options available to participants of the program.