A Woodstock study released last summer shows that over half of private-sector workers in Illinois lack access to an employment-based retirement plan. In many cases, this means that individuals aren’t saving enough for their retirement and could become overly reliant on Social Security or fall into poverty during their old age. To help these workers improve chances for retirement security, this legislation creates a program in which workers at companies with 10 or more employees can save three percent of earnings from each paycheck automatically through payroll deduction. This makes it an easy program for workers to participate in and makes it more likely that workers will save.

The program is structured to make it easy for workers to save and easy for employers to administer:

• Employers will automatically enroll workers into one of three typical IRA investment plans of their choosing, with the default being a target-date fund tied to their expected retirement age.
• Employees can opt out of participating, or change the default deposit amount and the retirement investment option at any time.
• Employers benefit by being able to offer a retirement plan to their employees without having to create or manage a plan or contribute to the plan. It is an extremely low-cost option for businesses.

Take a look at the fact sheet and FAQ for more information. You can also view the video below to learn more about Auto IRAs and access to retirement savings in Illinois.

Identical bills have been introduced in the Illinois House and the Senate. We ask you to sign your organization on as a supporter. The bills could be called in during the next few weeks and we want to show that there is support from a wide variety of organizations and financial institutions.

Please email me at ceccles@woodstockinst.org or call at 312-368-0310 if you can support this legislation. I’m happy to answer any questions.

Private-sector workers in Illinois need to save more for retirement, and the State can make it as easy as possible for them to do so. This legislation creates a simple IRA-type retirement plan with automatic enrollment, payroll deductions, portability, and preferential tax treatment to help secure a brighter future for millions of Illinoisans. We hope you will support this effort!