In just a few months, Illinois Secure Choice Savings Program Act ("Act") will require qualified employers in the Illinois to offer employees an employer-sponsored retirement plan.
This Act applies to Illinois employers that do not sponsor a qualified retirement plan and requires employers to automatically withhold five percent of an employee’s compensation, unless the employee elects a different amount or opts out of the program entirely.
Employers who do not comply with the Act may face a penalty of $250 per employee for the first year, and $500 per employee for each subsequent year.
You should look into this new development if:
You have at least 25 employees as reported to the Illinois Department of Employment Security for unemployment insurance payments;
Have been operating in Illinois for at least two years; and
Do not offer a qualified retirement plan to any Illinois employees.
The good news is the employers who participate in this program are not required to make any employer contributions; pay any administrative fees; act as a plan manager or fiduciary; and have any obligations under ERISA with respect to the program.