Illinois’ Secure Choice retirement savings program reaches milestone

[March 22, 2022]  By Kevin Bessler | The Center Square

(The Center Square) – A state-facilitated retirement savings program for private sector employees has reached a milestone in Illinois.

Illinois Treasurer Michael Frerichs announced the Secure Choice Savings Program now has over 100,000 participants.

Employers in Illinois with at least five employees are required to offer the program or another employer-sponsored retirement plan. Participants are enrolled in a Roth IRA managed by a third party, not by the state, with a default 5% payroll deduction. Employers are to automatically enroll their employees, but participants can change their contribution level or fund at any time, or opt out of the program altogether.

During a news conference Monday, Frerichs said nearly a quarter of Illinois retirees use Social Security for 90% of their retirement dollars.
 

“These numbers are frightening,” Frerichs said. “They do not lead to success. They do not lead to a retirement with dignity, and that is why the legislature created Secure Choice.”

In the past six years, 14 states have adopted state-facilitated retirement savings programs, with the potential to reach almost 20 million workers.

State Treasurer Michael Frerichs in Chicago.
Courtesy of BlueRoomStream

Ryan Gruenenfelder with AARP Illinois said saving for retirement is essential for Illinoisans, especially with the high cost of living in this state.

“We have 1.7 million members across this state who consistently let us know that Illinois becomes harder and harder to afford each year,” Gruenenfelder said. “Challenges that exist like rising property taxes and unnecessarily high utility costs.”

State Rep. Tom Demmer, R-Dixon, who is running for state treasurer against Frerichs, used the news conference to criticize his opponent.

“Two years ago, Treasurer Frerichs joined with [Gov. J.B. Pritzker] to support a radical tax increase plan on Illinois families. Frerichs even took the measure a step further by saying it could be ultimately used to tax retirement income – including pensions and 401ks – like Secure Choice. Thankfully voters rejected Frerichs’ call for taxing retirement income. However, with Frerichs continuously advocating for tax increases – even taxing retirement income – Illinois families and retirees have anything but secure choices for their hard-earned income and savings,” Demmer said in a statement.

Kevin Bessler reports on statewide issues in Illinois for the Center Square. He has over 30 years of experience in radio news reporting throughout the Midwest