Illinois is one of seven states currently in the midst of implementing state-sponsored retirement savings programs, but the plan may be halted by Congress’ efforts to roll back regulations.
In 2016, former Pres. Barack Obama’s administration adopted new U.S. Department of Labor (DOL) rules aimed at encouraging small businesses to offer retirement plans for workers. Illinois responded with the Secure Choice plan, which is in the process of launching and would be ready for small businesses and their employees in 2018. The plan would require companies that employ more than 25 people and don’t offer 401(k)s or pension plans to make state-run individual retirement accounts available to staff.
If the DOL rules are overturned, Illinois Treasurer Michael Frerichs told the Chicago Tribune, Illinois still has the authority to offer Secure Choice. However, participating businesses will no longer be protected from the Employee Retirement Income Security Act, which means that employees could sue their employers over alleged faults with the retirement plan.
While well-intentioned, the program would ultimately add to the list of mandates small businesses comply with. NFIB/IL State Director Mark Grant told The Associated Press, “If a business can afford to do this kind of thing, they would do it for their employees.”