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Updated: May 1, 2024

Illinois Secure Choice: Understanding Illinois’ state retirement program mandate

Published By:

Jon Davis

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Illinois Secure Choice is Illinois’ state-sponsored retirement savings program. Introduced in 2018, it offers 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 offer employees access to retirement savings at work.

Fast facts about Illinois Secure Choice

  • In 2018, the Secure Choice Retirement Savings Program officially launched with a rollout based on employee size
  • Businesses already offering an employer-sponsored plan can apply for an exemption
  • The November 1, 2023 deadline passed for employers with 5-15 employees

In our employer’s guide to Illinois Secure Choice, 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.

Explaining what the Illinois Secure Choice retirement savings program is

In a nutshell, Illinois Secure Choice is a state-sponsored retirement savings plan that automatically contributes a portion of an employee’s wages into an individual retirement account (IRA).


Which employers must offer Illinois Secure Choice?

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:

  • Signing up for Illinois Secure Choice, or
  • Offering a qualified plan through a provider on the open market


What’s the next deadline?

  • By November 1, 2023, employers with five or more employees are required to offer either Illinois Secure Choice or the qualified plan of their choosing


What were the previous deadlines?

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):


Illinois Secure Choice employer deadlines through November 2023

  • 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
  • An employer employing 16 to 24 employees: 11/1/2022
  • the latest deadline for businesses employing 5 to 15 employees passed: 11/1/2023

Keep in mind that any employer with five or more employees is required to offer Illinois Secure Choice, unless they have an exemption.

What is the Illinois Secure Choice fee?

For employers, there are zero fees and they do not make contributions to employee accounts. That said, employees are responsible for paying an Illinois Secure Choice administrative fee.


Per the Secure Choice 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.


Are any employers exempt?

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:

  • Are you an employer with fewer than five employees? You could be exempt from offering access to a plan
  • If you have been in business for less than two years, you may not be required to offer plan access
  • If you are already offering an employer-sponsored retirement plan to your employees, then you are likely exempt from having to offer Illinois Secure Choice. You can apply for the exemption here. To do this, you’ll need either your EIN or FEIN, and an access code. If you don’t have your access code you can request one here


Per the Illinois Secure Choice website, 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 Illinois Secure Choice include
  • 401(a) – including 401(k)
  • 408(k) – Simplified Employee Pension (SEP) plan
  • 403(a) – qualified annuity plan
  • 408(p) – SIMPLE IRA plan
  • 403(b) – tax-sheltered annuity plan
  • 457(b) – governmental deferred compensation plan

Which employees are eligible for Illinois Secure Choice?

For workers who are ready to start building their nest egg, they need to keep some criteria in mind. To participate, employees must be:

  • Age 18 or older
  • Employed in the state of Illinois
  • Full-time employee, part-time employee, or a business owner who is considered an employee


Is Illinois Secure Choice an IRA?

Yes, out-of-the-box savers in the Illinois Secure Choice 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.


In 2023, this means that the total annual contributions to traditional and Roth IRAs cannot exceed:

  • $6,500 (for those under age 50)
  • $7,500 (people that are age 50 or older)


How do contributions work?

Unless an employee opts out within 30 days, employers automatically enroll them in Illinois Secure Choice, 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. Similar to the other state-sponsored plans, accounts are also portable, so an employee keeps their account even if they change jobs.

Illinois Secure Choice or private plan

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.


Are there penalties if an employer does not offer Illinois Secure Choice?

The last thing we want to share is bad news, but yes, there can be penalties for noncompliant employers. Per section 85 of the Illinois Secure Choice Savings Program Act statute, here are the fines employers may want to keep in mind:

  • Employers that fail to enroll employees in the program without reasonable cause may be fined $250 per employee for the first calendar year that the employer is noncompliant
  • Or, $500 per employee for each subsequent calendar year the employer is noncompliant. Noncompliance does not need to be consecutive to qualify for the $500 penalty


More resources for Illinois employers

After learning more about how Illinois Secure Choice 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.

Both employers and employees can benefit from retirement benefits

Offering staffers a chance to save for retirement, whether through a state plan like Illinois Secure Choice 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.