Connections for Success



Don’t Forget About the Illinois Secure Choice Savings Program Act
Joshua Goldschmidt

The Illinois Secure Choice Savings Program Act requires certain employers within Illinois to either participate in the state-run retirement plan or to offer employees a different qualified employer-sponsored retirement plan. The amended law now requires many small businesses with as few as 5 employees to comply by November 2023. The purpose of the program is to get broader access to retirement savings for many employees in Illinois.

Determining Requirements

Employers with fewer than 5 employees and who have been in business less than two years, or who already have an employer-sponsored retirement plan, are not required to register for the program. All other employers in Illinois are required to register or facilitate an employer-sponsored plan by the following deadlines:

  • 16+ employees: November 1, 2022; or
  • 5-15 employees: November 1, 2023.

Penalties for non-compliance are $250 per employee for the first year and $500 per employee for each subsequent year. The $500 penalty applies to all years after the first year, even if the years are non-consecutive.

Illinois Secure Choice Plan (State Sponsored Plan)

Secure Choice is a Roth individual retirement account (IRA) where contributions are post income tax. The benefits of Secure Choice are that registration is easy and intended to take a few hours at most, there are no fees for employers and the time needed for payroll deductions for the program should be similar to the time needed to make other common payroll deductions. As such, administration is not intended to be burdensome.

Only employers with 5 or more eligible employees and who do not already have an employer-sponsored retirement plan can register. Employers who are eligible to register but have fewer than 15 employees do not need to wait until November 1, 2023. The above listed date is a “comply by” date, but the program is open now.

The program does have some downsides compared to other employer-sponsored plans. Employers can not contribute to the plan or match employee contributions. Because it is a Roth IRA plan, the max contribution per employee in 2023 is $6,500 if under 50 and $7,500 if older than 50. Some employees may not be eligible to contribute at all due to income limits or other plans they have.

However, employers can opt out at any time and switch to an employer-sponsored plan.

Related Read: Ready, Set and Coming Soon to Illinois: A Savings Program

Employer-Sponsored Plans

Employers can sponsor a plan instead of registering for Secure Choice. Benefits from sponsoring a plan can include the ability to provide an employer match, the ability for higher earners to contribute more to a 401(k) as opposed to an IRA and that some 401(k) plan administrative fees can be tax deductible.


Employers without an employer-sponsored plan should check if they are required to provide a plan under the Illinois Secure Choice Savings Program Act. If they are required to provide a plan, they should research their options and consult with experts to help them determine what is the best fit for their needs.

For more information, contact Joshua Goldschmidt at [email protected] or 312.670.7444. Visit to learn more about our Law Firm Group.

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