Legislators raise concerns over IL bill revising Secure Choice Savings
Program
[March 08, 2025]
By Catrina Barker | The Center Square contributor
(The Center Square) – An Illinois measure seeks to adjust the
state-sponsored retirement savings program.
Workers at companies that don't offer a retirement plan are
automatically enrolled in the Secure Choice Savings Program and the
automatic contribution starts at 5% of the employee's paycheck.
House Bill 1435 would amend the Secure Choice Savings Program Act and
change penalty criteria for employers who fail to enroll employees in
the program and remit contributions.
During a recent House committee hearing about the bill, state Rep.
Blaine Wilhour, R-Beecher City, said, “we don’t need this program at
all.”
Christine Cheng with the state treasurer’s office said that was an “over
statement.”
Wilhour and Cheng discussed how Illinoisans can access federal tax
credits with retirement savings programs outside the Secure Choice
Program.
The state program’s asset managers are BlackRock and State Street Global
Advisors.
BlackRock, one of the largest asset management firms globally, has
partnered with various philanthropic organizations, including the Tides
Foundation, which has received support from Gov. J.B. Pritzker’s family.
State Rep. Travis Weaver, R-Edwards, asked Cheng about when an employer
would be subject to fines.
“It's a failure to fully facilitate a workplace retirement savings
option. They might not have even registered or told us that they have a
qualified plan. They might have registered but then never added
employees,” said Cheng. “They might have added employees but never
actually remitted the payroll deductions that those employees have to
fund their retirement accounts.”
Employers in noncompliance will pay a $250 per employee fine for the
first calendar year of non-compliance and then it goes up to $500 for
any second or subsequent year of noncompliance.
The bill’s sponsor, state Rep. Gregg Johnson, D-East Moline, said the
intent is not to punish employers.
“In each case, I believe 26 so far that we've talked about in which the
fines were initially administered,” said Johnson. “Those fines have been
returned back to the employers once they've come to compliance. This is
simply looking out for the well-being and for the future of the
employees that work for these employers that also have new residents
here in the state of Illinois.”
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HB 1435 would amend the Secure Choice Savings Program Act by
ensuring that enrollees’ accounts are individual retirement
accounts, either Roth or Traditional, which can be contributed to
from multiple employers and are portable.
State Rep. Steven Reick, R-Woodstock, said he’s hearing concerns
about how the proposed changes to the Secure Choice Savings Program
will be burdensome for employers.
“[Say] a kid works three, four weeks and says, ‘to hell with it, I'm
working too hard and I want to do something else.’ I'm obliged to
give that person [program benefits], and then he goes through all
the processes, he signs up and then he's gone,” Reick said. “I'm
creating an administrative burden upon myself in a business
environment where I may have a low margin, and this is just cutting
into it for the purposes of providing something for which the person
is not going to ultimately take full advantage.”
Cheng talked about the employers’ administrative obligations.
“It's one time registering online on our website to then create an
online access, an account that they can use,” said Cheng. “It's
uploading their information on eligible employees, and if they have
people who do want to participate, doing the payroll deduction
process as they might for any other type of payroll deduction to
make sure the money move.”
Reick said that “still encompasses or entails an administrative cost
to the employer.”
Cheng explained the state tells employers who may be in high
turnover environments to wait 90 days to add part-time employees to
the portal.
“They say, ‘well how soon after I hire someone do I have to add
them?’ If they’re looking at a position that for whatever reason
doesn’t hold onto people for very long, we often tell somebody to
wait until 90 days pass,” said Cheng. “If that person is still there
then think about adding them to the portal.”
The bill passed out of committee with an eight to four vote.
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