SB 2758 (Biss/Currie) passed out of the House Pensions Committee this week and is now awaiting a vote on the floor.
The bill mandates that employers set up an automatic Individual Retirement Account for their employees, a system to be administered by the Illinois Dept. of Revenue and a newly created Board led by the Illinois Treasurer.
The legislation targets small businesses with 25 or more employees (both full-time and part-time) and forces them to not only set up the accounts but also automatically deduct at least 3% from their employees’ paychecks. An employee would have to actively pursue “opting out” if they did not want to participate.
While proponents continue to argue this is merely a “payroll deduction” for employers, opponents hammered away at the question of who has fiduciary responsibility for the plan. Concerns have been raised that under a federal law governing retirement plans either the employer or the state of Illinois may have some fiduciary culpability under the proposal outlined in SB 2758.
This question is quite valid as Illinois would be the first state to implement such a mandate. Other states like California and Connecticut are studying the concept first due to worries it may hurt the private marketplace or have problems with the federal law.
A broad based coalition of business groups, insurance and financial companies, agents and the banking industry are working hard to defeat the measure.
NFIB/Illinois opposes the measure because it mandates business owners to offer an Individual Retirement Account to their employees and sets up a state run IRA plan allowing government to intervene in the marketplace.
The bill has already passed the Illinois Senate.
Please contact your state representative today and tell them to vote NO on SB 2758.
