ILLINOIS BUSINESS OWNERS
A retirement savings program is mandatory as of November 2019.
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Effective November, 2019, The Illinois Secure Choice Savings Program Act (Secure Choice), will require Illinois businesses to automatically enroll their employees in the savings program if they have at least 25 employees, have been in business for at least two years, and do not provide a qualified savings plan of their own. Businesses who meet these specifications will either need to implement a retirement plan through providers of their choice or will need to enroll employees in Secure Choice’s Roth IRA. Please note: Secure Choice has already been implemented for companies with more than 100 employees.
- Time. You will be required to enroll every employee, set up payroll deductions, send educational material, and remit employee contributions to the provider. These time-consuming tasks are done for you, by service providers, when you utilize an advisor.
- Tax benefits. With a Roth IRA, contributions are taxed now, meaning the benefit of deferred taxation isn’t applicable. In addition, you will miss out on the tax benefits from matching employee contributions.
- Limited contributions. Roth IRAs have stricter contribution limits. The limit for 2019 is $6,000 ($7,000 if age 50 or over).
- No advisor. Financial advisors are not required under the Secure Choice model, leaving your employees without the guidance to make an informed decision that is in their best interest.