FAQ

Top Questions

Do any other states have programs like this?

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

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.

What happens to my account when I change employers?

Your Roth IRA through Illinois Secure Choice belongs to you. Your money remains in your account as your retirement savings. If your new employer facilitates Illinois Secure Choice, you will receive a notification and payroll deductions will begin at your new job unless you opt out. If your new employer offers an employer-sponsored retirement plan, then they are not required to facilitate the Illinois Secure Choice program, but you may be eligible for the employer-sponsored retirement plan.

As a saver, how do I set up my account online after I've been enrolled in Illinois Secure Choice?

Go to saver.ilsecurechoice.com and click "Set up your account."

If you choose to participate, you'll need to select a username and password before setting up your account.

If you choose to opt out, you won’t need to set up a username and password if you received notification within the past 30 days. After that point, you will need to set up a username and password to complete your opt out.

As a saver, what happens if I opt out of participating?

You can opt out of participating at any time. If you opt out within 30 days after the program notifies you about the establishment of your account, no payroll deductions will be made from your paycheck on your behalf and your account will not be activated. If you choose to stop participating after contributions have begun, payroll deductions will end. You can leave the money in your account to grow your retirement savings, or you can transfer or roll over to another Roth IRA. You may also request a distribution, which may be subject to federal taxes. You may rejoin the program at any time by notifying the program or your employer that you would like to start contributing to your account again.

Can I take money out of my account?

Yes, you can take your money out of your Roth IRA at any time. There is no fee or penalty for withdrawing your contributed amounts. However, investment earnings are subject to taxation and an additional penalty if taken out before age 59½, and before you’ve had your first Roth IRA for five years unless you qualify for the first time homebuyer exception to the penalty. Please consult with a tax expert or financial advisor for information specific to your own circumstances.

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.

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 long will the enrollment process take to complete online for employers?

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.

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 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.

Account Access

How do I set up my account online after I've been enrolled in Illinois Secure Choice?

Go to saver.ilsecurechoice.com and click "Set up your account."

If you choose to participate, you'll need to select a username and password before setting up your account.

If you choose to opt out, you won’t need to set up a username and password if you received notification within the past 30 days. After that point, you will need to set up a username and password to complete your opt out.

Can I set up my account or opt out without using the website?

Yes. Contact Client Services via email at clientservices@ilsecurechoice.com or by phone at (855) 650-6913 Monday through Friday, 8 a.m. – 8 p.m. CST for assistance.

How do I track my account balance?

You can access your account online at saver.ilsecurechoice.com or by calling (855) 650-6913. You will also receive periodic account statements via email or mail.

What happens to my account if I move out of state?

Your Roth IRA through Illinois Secure Choice belongs to you. If you still have Illinois sources of income from an employer that facilitates Illinois Secure Choice, you can continue to participate in the program by payroll deduction. If your employer does not facilitate Illinois Secure Choice, the program will, in the future, allow you to continue to make contributions on your own through direct deposit. This feature is not yet available. You can also roll over or transfer your account into a Roth IRA outside of Illinois Secure Choice if the outside Roth IRA accepts rollovers or transfers.

What happens to my account when I change employers?

Your Roth IRA through Illinois Secure Choice belongs to you. Your money remains in your account as your retirement savings. If your new employer facilitates Illinois Secure Choice, you will receive a notification and payroll deductions will begin at your new job unless you opt out. If your new employer offers an employer-sponsored retirement plan, then they are not required to facilitate the Illinois Secure Choice program, but you may be eligible for the employer-sponsored retirement plan.

What happens if I opt out of participating?

You can opt out of participating at any time. If you opt out within 30 days after the program notifies you about the establishment of your account, no payroll deductions will be made from your paycheck on your behalf and your account will not be activated. If you choose to stop participating after contributions have begun, payroll deductions will end. You can leave the money in your account to grow your retirement savings, or you can transfer or roll over to another Roth IRA. You may also request a distribution, which may be subject to federal taxes. You may rejoin the program at any time by notifying the program or your employer that you would like to start contributing to your account again.

Contributions

Can I choose a different savings rate than 5 percent?

Yes, you can choose a savings rate of as little as 1 percent and as much as 100% of your available wages in1 percent increments, up to annual Roth IRA contribution limits. Please note that contributions are made post-tax, and your employer can’t deduct more than the amount of compensation available after other payroll deductions that have higher preference as required by law are deducted. You can make changes to your contribution rate online or by phone. Please note that contributions are made post-tax, and your employer can’t deduct more than the amount of available compensation after they have made any other payroll deductions that have higher preference as required by law are deducted. You can make changes to your contribution rate online or by phone.

Can I have another retirement savings plan at the same time as this one?

Yes, you can contribute to more than one savings plan or account at a time. Please note, however, that the IRS contribution limits for Roth IRAs are cumulative for all Traditional and Roth IRAs owned by an individual.

Can I roll over money from another plan into my Illinois Secure Choice account?

Yes. You can keep your money in your Secure Choice Account, roll it over into another Roth IRA, or take your money out entirely – it’s your money and your decision, although some taxes or penalties may apply depending on when or for what purposes you withdraw your money.

Can workers contribute a set dollar amount per paycheck instead of a percentage of their wages?

No; however this feature may be available in the future.

Can I have my contribution rate increased automatically each year?

Yes, you can elect to automatically increase your contribution rate in1 percent increments each year.

If I elect to have automatic increases, when does my contribution rate increase?

Should you elect to have optional automatic increases, the rate increase occurs on January 1 each year.

How are contributions made to my account?

Your employer will deduct your contribution from your paycheck every pay period and remit the funds to your account. At a later date you will also be able to make contributions yourself through your bank account or by check.

How will I know if I am nearing the annual IRA contribution limit?

Illinois Secure Choice will monitor your account contributions and notify your employer to stop contributions when you are nearing the limit. Please note, Illinois Secure Choice will not have information on your eligibility to contribute to a Roth IRA, or any other IRAs you may maintain and contribute to. It is your responsibility to ensure that across all your IRAs, you are contributing within the IRS’ annual limits. Please consult a tax expert or financial advisor to discuss your specific circumstances.

If I have my own IRA in addition to the State's program, does the contribution limit apply to each separately or to the combined amount for both?

The IRS' annual IRA contribution limits apply to the combined amount contributed to all of your IRAs, both Traditional and Roth.

Is the contribution made pre-tax or post-tax?

For Roth IRAs, contributions are made on a post-tax basis. The percentage contributed is based on your gross income earned with your facilitating employer.

Why don’t my Illinois Secure Choice contributions show up on my W2?

Illinois Secure Choice acts as a payroll deduction IRA, not a retirement plan as defined for the W2, so you won’t see your contributions reflected on your W2.

Your IRA trustee will file a Form 5498, IRA Contributions Information with the IRS and you will receive a copy no later than May 31. This does not need to be filed with your taxes but should be kept with your tax records as documentation of your contributions for a particular tax year.

Is the contribution rate based on gross or net income?

Your contribution rate is based on gross income earned with your facilitating employer.

Is there a limit to how much I can contribute?

Yes, contribution limits for Roth IRAs are set by the federal government. For 2018, you can save up to $5,500 per year if you’re younger than 50 and $6,500 per year if you’re 50 or older, as long as you have that much in compensation and are under certain income levels based on your modified adjusted gross income. This contribution limit applies across all IRAs you may have (both Traditional IRAs and Roth IRAs with the State and elsewhere).

Is there a maximum percentage of income that can be contributed?

There is no upper limit on the percentage of income that can be contributed; however, Roth IRAs have annual contribution limits based on your modified adjusted gross income. Please also note that contributions are made post-tax, and your employer can’t deduct more than the amount of available compensation after they have made any other payroll deductions that have higher preference as required by law.

What is the standard contribution rate?

The standard contribution is 5 percent of gross income earned with your facilitating employer. You can choose to save more, or less, at 1 percent increments.

Distributions

Am I allowed to take distributions if I'm still working during my retirement?

Yes, you can take distributions from your account at any time. You may want to consult a tax expert or financial advisor to help you consider your best sources of income if you are retired and working and if a distribution makes sense.

Are there restrictions for withdrawals beyond the normal restrictions for Roth IRAs?

No. Savers have the same rights to withdraw amounts from their Illinois Secure Choice Roth IRA as they would for any other Roth IRA. However, a federal 10 percent early withdrawal penalty may apply on the taxable amount if you are under age 59 ½ and no exception for the penalty applies. Please consult with a tax expert or financial advisor for information specific to your circumstances.

Can I roll the money I have in Illinois Secure Choice into another retirement plan?

You can keep your money in your Secure Choice Account, roll it over into another Roth IRA, or take your money out entirely – it’s your money and your decision, although some taxes or penalties may apply depending on when or for what purposes you withdraw your money.

Can I take money out of my account?

Yes, you can take your money out of your Roth IRA at any time. There is no fee or penalty for withdrawing your contributed amounts. However, investment earnings are subject to taxation and an additional penalty if taken out before age 59½, and before you’ve had your first Roth IRA for five years unless you qualify for the first time homebuyer exception to the penalty. Please consult with a tax expert or financial advisor for information specific to your own circumstances.

Can I use my savings through the program for the down payment of a house?

You can withdraw your contributions for any reason at any time without taxation. In certain circumstances, distributions from a Roth IRA that include investment earnings can also be used toward the down payment for first time home buyers. Investment earnings are subject to taxation and an additional penalty if taken out before age 59½ and before you’ve had your first Roth IRA for five years unless you qualify for the first time homebuyer exception to the penalty Please consult with a tax expert or financial advisor to determine what steps and restrictions may apply to you.

Is there an administrative fee or penalty for taking out my money?

There is no administrative fee or penalty for withdrawing your contributions to a Roth IRA. However, investment earnings are subject to taxation and an additional 10 percent penalty if taken out before age 59½, and if your first Roth IRA has been open for fewer than five years. Please consult with a tax expert or financial advisor for information specific to your own circumstances.

Is there a minimum retirement age for the program?

There is no minimum retirement age. However, there is a federal tax penalty for withdrawing any investment earnings from a Roth IRA before age 59½ unless it’s for a qualifying reason. Please consult with a tax expert or financial advisor for information specific to your own circumstances.

Is there a waiting period before I can withdraw my money?

You can take your money out of your Roth IRA at any time. There is no fee or penalty for withdrawing your contributed amounts (although you may miss them at retirement time if you’ve taken the money early for non-retirement purposes). Investment earnings are subject to taxation if taken out before age 59½, and if your first Roth IRA has been open for fewer than five years. Please consult with a tax expert or financial advisor for information specific to your own circumstances. Please allow up to 10 business days for the proceeds to reach you. Distributions will generally be processed within 3 business days of accepting the request. During periods of market volatility and at year-end, distribution requests may take up to 5 business days to process. For security purposes, there will be a hold of 9 business days on distribution requests when there is a change to your address and a hold of 15 calendar days on distribution requests following a change to your banking information. Distributions of contributions made by check, wire or ACH will not be available for withdrawal for 7 business days.

What happens to my money if I die and have no named beneficiaries?

If you die and have no named beneficiaries, the account will be payable to your estate under the terms of the IRA. Accounts that become unclaimed property will be subject to

Eligibility

If I am a homemaker or another without income am I eligible to join Illinois Secure Choice?

Not at this time. However, Illinois Secure Choice is considering ways to allow people to opt into the program without going through an employer.

Can I opt out at any time?

Yes. You can opt out at any time through your employer; online at saver.ilsecurechoice.com; by calling at (855) 650-6913 Monday through Friday, 8 a.m. – 8 p.m. CST; or by mailing an Opt Out form to the program.

Can I participate in the program even if I'm retired?

No. You must be working for a facilitating employer in order to participate in the program. At a future point, you will also be able to opt into the program independent of any employer by setting up your own account and making direct contributions to it.

Can I rejoin the program if I opted out?

Yes, you can rejoin at any time by notifying your employer that you would like to start contributing to your account again.

Do I have to work for a certain amount of time before I'm eligible?

There is no mandatory waiting period, but the enrollment process takes 60 days. If you work for an employer for less than 60 days, you will not be enrolled by that employer.

Does saving through this program impact my eligibility for financial aid for college?

In general, qualified retirement accounts are not counted for federal financial aid; however, you should carefully review your own circumstances with a tax expert or financial advisor. Withdrawals from IRAs can also jeopardize financial aid for the year following the withdrawal. For more information, check with your financial aid office.

Does saving through this program impact my eligibility for other programs like SNAP or TANF?

In general, federal benefits programs do not count retirement assets against a person's eligibility. For more information, check with your benefits office.

How do I opt out?

You can opt out through your employer; online at saver.ilsecurechoice.com; by calling (855) 650-6913 Monday through Friday, 8 a.m. – 8 p.m. CST; or by mailing an Opt-out Form to the program.

If I am actively participating in an employer-sponsored retirement plan through my employer, can I participate in Illinois Secure Choice as well?

Not at this time. However, this may be permitted at a future date.

I'm self-employed. Can I join the program?

At a future date, self-employed individuals will have the ability to opt in to the program.

Is there an income limit to participate in the Illinois Secure Choice program?

The standard account option for savers will be a Roth IRA. The income limits for Roth IRA savers are set by the federal government. For 2018, the limits are $135,000 for a single tax filer and $199,000 for married taxpayers filing jointly. Beginning in 2019, Illinois Secure Choice will offer a traditional IRA account as an electable choice.

My employer offers an employer-sponsored retirement plan to some employees but I'm not eligible for it. Can I join the Illinois Secure Choice program?

Currently, employees not eligible for their workplace employer-sponsored retirement plan are not eligible for Illinois Secure Choice.

Employer Registration

How do I know if an employer offers the Illinois Secure Choice program?

It’s easy – just ask. Contact your employer to determine if they facilitate Illinois Secure Choice.

How do I know if my employer is required to offer the Illinois Secure Choice program?

If your employer has 25 or more employees, has been in business for at least 2 years, and doesn't offer an employer-sponsored retirement plan to its employees in Illinois, it must offer the Illinois Secure Choice program.  

Enrollment Process

How do I join Illinois Secure Choice?

If your employer facilitates Illinois Secure Choice, you won’t need to do anything to enroll and start saving. Your employer will automatically enroll you unless you opt out. Remember, Illinois Secure Choice is completely voluntary.

How will I be notified about the program?

If your employer is required to facilitate Illinois Secure Choice, your employer will register with the program and then automatically enroll you. Then you will receive an invitation from Illinois Secure Choice.

I am a worker. Can I join the pilot of the Illinois Secure Choice?

If your employer doesn't offer an employer-sponsored retirement plan, let them know about Illinois Secure Choice. Employers who want to join the pilot can contact Illinois Secure Choice to learn how they can offer the program to their employees.

What should I do if I have questions or want advice about enrolling in this program?

You can visit saver.ilsecurechoice.com for more information, call at (855) 650-6914 Monday through Friday, 8 a.m. – 8 p.m. CST, or talk to a financial professional.

Fees and Costs

Does Illinois Secure Choice have a large employee staff?

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

Is there a fee for participating in the program?

Yes, as with any investment or retirement program, there is an ongoing fee which is paid as a percent of your assets under management. This fee for each investment option is approximately 0.75% of assets per year ($0.75 for every $100 saved), and it pays for the administration of the program as well as the operating expenses charged by the underlying investment funds in which the program’s portfolios are invested. The fee is computed daily and netted from the assets in an investment option. Investment returns are credited to saver accounts ‘net of’ this cost.

What does the administrative fee pay for?

The fee covers all administrative costs associated with the program, such as the cost of maintaining your account; oversight of the program’s investments; providing customer service; keeping records; online and phone services; and the operating expenses of the underlying investment funds in which the investment options are invested.

Fiduciary Responsibility and Risk

Is my money and rate of return guaranteed?

No, all investments have some form of risk. However, the program offers a range of investment types to help you build an investment option that balances different levels of risk for your individual circumstances.

General

Do any other states have programs like this?

California, Connecticut, Maryland, and Oregon have also passed legislation to create similar programs. Oregon has already implemented a workplace retirement 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. Oregon has introduced a workplace-based program, OregonSaves. Illinois's program is modeled after these plans as well as successful large employer plans in the U.S.

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 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 go find a financial institution that offers an IRA. 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. This program is also portable and can move with you from one job to the next.

How knowledgeable are customer service representatives about the program?

Customer service representatives are fully trained in all aspects of the program. The staff includes 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 which is also a workplace-based program. Several other states are planning to implement similar programs soon after.

Is the Illinois Secure Choice program considered an employer-sponsored 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 employer-sponsored retirement plans. 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 State Employees Retirement System of IL (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 Board?

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

What was the legislation that created the Illinois Secure Choice?

Illinois Secure Choice Savings Program was 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, including tutorials, are available online at www.saver.ilsecurechoice.com. Trained, knowledgeable account service professionals can also be reached by phone at (855) 650-6913 Monday through Friday, 8 a.m. – 8 p.m. CST.

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 similar to the Illinois program. Several other states have also passed legislation to create similar programs, but Illinois is currently ahead of these states in the development and implementation process.

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 $2,5001, 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.2 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 filled3.

1The Continuing Retirement Savings Crisis: National Institute on Retirement Security, March 2015

2Social Security Bulletin, Vol 78, No.2

2AARP 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. Certain materials may 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 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 Retirement Savings Board is responsible for making decisions about the investments options available to participants of the program.

Are the funds actively managed or passively managed?

For the most part, the funds offered through Illinois Secure Choice use passive management.

Can I save through a Traditional IRA instead of a Roth IRA through Illinois Secure Choice?

The program may offer Traditional IRAs at a later date.

How do I know where my money is being invested?

Information about each investment will be available online at saver.ilsecurechoice.com or by calling (855) 650-6914 so that participants will know exactly in which fund(s) their money is being invested.

How is investing different than putting my money in a bank?

Banks are best known for offering checking and savings accounts that pay interest, although they also offer other savings and investment products. An Illinois Secure Choice IRA allows you to save through payroll deduction and invest using a focused set of choices for this retirement program. Illinois Secure Choice offers a Capital Preservation fund, Target Date retirement funds, a Conservative fund, and a Growth fund.

Is there a risk of losing my money?

All investing involves some risk, including the risk of loss. There are other risks to consider as well, such as: not saving enough, outliving your savings, and the risks posed by inflation to the savings you accumulate. Illinois Secure Choice offers a range of investments with various levels of risk to help you meet your goals depending on your age, distance from retirement, and risk tolerance. Illinois Secure Choice offers a Capital Preservation, and also offers market-based investments like the target retirement funds and a growth option.

Is there any guarantee of earnings on my investments?

No. All investing involves some risk and there is no guarantee of earnings or future results. However, the program offers a capital preservation fund, which seeks maximum safety.

How should I address market volatility?

While there is always a risk of loss, investing for retirement should be approached with a long-term goal to grow your savings over time. The nature of the market is to fluctuate — there’s no way to time your investment activity to only benefit from positive gains in the market. Illinois Secure Choice offers investment options with various risk levels so you can choose the one(s) that fit your risk tolerance.

What are the expense ratios for the investment options?

The expense ratios and other information for the funds can be found online at:

Illinois Secure Choice Capital Preservation Fund
State Street Instl Liquid Reserves Instl

Illinois Secure Choice Conservative Fund
Schwab US Aggregate Bond Index

Illinois Secure Choice Growth Fund
Schwab® S&P 500 Index

Illinois Secure Choice Target Date Fund
BlackRock LifePath® Index Retire K

It’s important to note that the 0.75 percent fee for the program covers the operating expenses of the investment funds in which the investment options are invested.

What is the professional firm that is administering the program?

The Illinois Secure Choice Board has selected Ascensus as the program’s administrator. Based in Pennsylvania and with offices nationwide, Ascensus is an experienced retirement and college savings services provider. Ascensus will act as the Roth IRA trustee, manage account records, operate the website (www.ilsecurechoice.com), receive and process retirement contributions and distributions, and provide customer service.

If I don’t select investments for my account what will happen?

Should you not select a specific investment fund, your contributions will be allocated to the Illinois Secure Choice Target Retirement Fund.

Whom should I talk to about investment options?

You can visit the program website for more information or talk to a financial advisor about investment options.

Will participants’ money be pooled with money from other programs at the city, state, or federal level?

No. Saver’s money will be invested in the IRA Investment Option chosen by the saver from a menu of options. Your account balance will be tracked at an individual level so that you will always be able to tell how much is in your account.

Savers Credit

Will participants be eligible for the Saver's Credit from the IRS?

Yes, participants may be able to take advantage of the Saver's Credit if they meet the eligibility requirements. The Saver's Credit is a federal tax credit available for those who make contributions to their retirement plan. Visit https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit for more information. Please also consider consulting with a tax expert or financial advisor to determine if you qualify for the Saver’s Credit.

Security

Are there legal protections from creditors for account funds?

Accounts are structured as Roth IRAs, which may be protected from creditors. Circumstances vary, and savers should consult an appropriate expert if they need an opinion on their specific circumstances.

Are there measures in place to keep my account safe from cyber threats?

Yes, Illinois Secure Choice has processes in place to protect the security of employee accounts and information.

Does Illinois Secure Choice protect the security of funds remitted to the employee accounts?

Yes, Illinois Secure Choice has processes in place to protect the security of employee contributions to their accounts.

Will my personal information used for this program be reported to other government agencies for the purpose of determining immigration status?

No, reporting will not be made for the purpose of determining immigration status.

Timeline

When will the program begin?

The program will begin in July 2018 with a small pilot group of employers. The program is scheduled to roll out in phases, starting with larger employers, in 2019. The registration deadlines for employers are 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

For more information on definitions of employer, employee, and employment, and number of employees, please see the administrative rules associated with the program.