We previously reported about the requirements of the Illinois Secure Choice Act, a state-sponsored program with the goal of increasing retirement savings. The Act requires Illinois employers with 5 or more employees to either offer their own tax-qualified retirement plan (such as a profit sharing or 401(k) plan) or register as a participating employer under the Secure Choice Program.
Illinois Secure Choice established a phased compliance deadline based upon the size of an employer. The final deadline, applicable to companies with 5-15 employees, is November 1, 2023. Companies that do not offer a retirement plan must register with the Secure Choice Program by that date. (Companies with more than 15 employees should already be in compliance.)
Importantly, companies do not have to make employer contributions to their retirement plans in order to be exempt from the registration requirement. As long as a company offers a 401(k) plan that provides employees the opportunity to save retirement funds, the company is not required to register and participate in the Secure Choice Program.
What Should You Do Now?
Companies with 5-15 employees that do not sponsor a retirement plan should determine whether it makes more sense to adopt a 401(k) or similar plan, or to register under the Secure Choice Program.
If you have questions about Illinois Secure Choice and its requirements, contact your Much attorney or another member of our Labor & Employment group.