Updated: July 27, 2026 • 14 min read
Published By:
Jon Davis
As of June 15, 2026, the state officially relaunched its state-mandated retirement program under a new name: My Illinois Savings. Previously introduced as Illinois Secure Choice in 2018, the program continues to offer private workers without access to retirement savings options a way to save money for post-work life. Additionally, it provides employers with a low-maintenance way to give employees access to workplace retirement savings.
In our employer’s guide to My Illinois Savings, we’ll cover who needs to participate, the types of savings opportunities the program provides, and how there are also other options for employers to offer access to retirement savings through private plans.
Many studies suggest that private-sector employees find that saving for retirement can be an uphill battle. In response, states such as Illinois are introducing and passing legislation that require eligible employers to offer their employees the opportunity to start saving for retirement (either through a state-run plan or a private provider). So far, it has had a mostly positive impact on private-sector workers in the state.
Illinois Secure Choice is just one of many state-sponsored retirement programs popping up throughout the US. For example, Virginia, Colorado, Connecticut, and New Jersey all have state plans, while others such as Hawaii and Minnesota are inching closer to introducing theirs.
Let’s find out the ins and outs of how this program works and what the requirements are.
In a nutshell, My Illinois Savings is a state-sponsored retirement savings plan that automatically contributes a portion of an employee’s wages into an individual retirement account (IRA).
Since November 2022, the state of Illinois requires employers that have been in operation for at least two years with five or more employees to offer their staffers access to a qualified retirement plan. As an employer you can decide between:
What’s the next deadline?
Since being introduced five years ago, a flurry of enrollment deadlines have come and gone. Here’s how the rollout was planned, per the state’s brochure (including the most recent deadlines we mentioned above):
Many business owners and employees refer to the state’s new requirement as Illinois’ 401(k) mandate. However, the program does not actually mean you have to specifically offer a 401(k). While participation in a retirement savings program is mandatory for qualifying businesses, you have options.
Keep in mind that any employer with five or more employees is required to offer My Illinois Savings, unless they have an exemption.
For employers, there are zero fees and they do not make contributions to employee accounts. That said, employees are responsible for paying an My Illinois Savings administrative fee.
Per the My Illinois Savings savers site, fees cover administrative program costs and other operating expenses. Fees are collected in the form of an “annual asset-based fee of approximately 0.75%,” which eligible employees pay approximately $0.75 (75 cents) per year for every $100 in their account.
There can be some exceptions to the rules. For example, if you as an employer fit any of the following criteria, you could be exempt:
If you are an employer who already offers one of the following plans in the table below, applying for an exception might be in the cards.
| Plans that may qualify for an exemption from My Illinois Savings | |
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For workers who are ready to start building their nest egg, they need to keep some criteria in mind. To participate, employees must be:
Yes, out-of-the-box savers in the My Illinois Savings can start building their nest egg with a Roth IRA. Employees should also keep in mind that there are savings limitations set by Uncle Sam.
Yes, participants in My Illinois Savings start building their nest egg with a Roth IRA. Employees should also keep in mind that the IRS sets annual limits on how much they can save.
For 2026, total annual contributions to traditional and Roth IRAs cannot exceed:
Unless an employee opts out within 30 days, employers automatically enroll them in My Illinois Savings, beginning with a savings rate of 5% of their gross pay (which is deducted from paychecks on an after-tax basis).
Note: Per the legislation, maximum contribution rates can be up to 10% of an enrollee’s wages.
If an employee is more comfortable with a different contribution amount, they can log into their account and adjust the rate at any time. They may also opt out of participating altogether if they choose. A survey conducted by the Pew Charitable Trusts found that of the employees who do opt out, 29% cited needing funds for more immediate needs.
Similar to the other state-sponsored plans, accounts are also portable, so an employee keeps their account even if they change jobs.
If you are trying to figure out how and what type of retirement plan to offer your employees, our 401(K) guide for small businesses can help. The good news is that there are retirement savings options for every company, no matter which path you take. You can also explore private 401(k) options for Illinois employers to find the best fit for your team.
The last thing we want to share is bad news, but yes, there can be penalties for noncompliant employers. Per section 85 of the My Illinois Savings Program Act statute, here are the fines employers may want to keep in mind:
After learning more about how My Illinois Savings works, you may find some other resources we provide to be useful. For example, our guide to Illinois payroll taxes also includes a free payroll calculator you can use.
Offering staffers a chance to save for retirement, whether through a state plan like My Illinois Savings or a private provider, can have positive effects for employees and the companies that offer them. On the one hand, it allows team members to save money for retirement, which can go a long way toward securing their future. Moreover, savvy employers can use savings plans to attract job candidates and retain top performers.
If you have questions about picking a retirement plan, the OnPay benefits team can help!
Please note all material in this article is for educational purposes only and does not constitute tax, benefits or legal advice. You should always contact a qualified tax, legal or financial professional, in your area for comprehensive tax or legal advice.
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.
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