The innovative plan to create a mobile retirement savings account that travels with the worker topped the 100,000-enrollment milestone, Illinois State Treasurer Michael Frerichs said.
Frerichs set up the Secure Choice retirement savings program to combat the retirement savings crisis in Illinois and across the country. Illinois is a national leader in offering an auto‑enroll IRA program. Workers in Illinois began saving in July 2018.
“A retirement savings tool that can travel from job-to-job with the worker makes it easier to save, allows a worker to retire with dignity, and saves taxpayer money by reducing the need for publicly funded safety‑net programs,” Frerichs said.
More than 100,000 workers and 6,400 employers participate in Secure Choice, with $82 million already saved. None of this was possible without Secure Choice. The 100,000 milestone was surpassed in the first quarter of this year.
“I chose to enroll in Illinois Secure Choice to increase my retirement options,” said Sam Hall, a father of three children who works as the program director for DREAAM in Champaign, the Rantoul Division, a social services organization helping boys and young men between the ages of 5 and 24. “The enrollment process was easy, and I feel more secure knowing I have a plan for retirement.”
DREAAM stands for Driven to Reach Excellence and Academic Achievement for Males. Tracy D. Dace is the Founder. “As a CEO, I was impressed with the ongoing support from the Illinois Secure Choice team to establish an account, enroll employees, and manage the administration of the deductions,” Dace said. “The built-in support indicated a commitment to excellent customer service and overall program quality.”
The General Assembly required employers to either offer a retirement savings plan or participate in Secure Choice, which is overseen by a seven-person board chaired by Frerichs. Secure Choice investments are managed by a private-sector financial services firm and kept in a trust outside of state government and its finances.
Key to passing legislation that created Secure Choice was the assurance that employers would not be financially liable for plan administration and would not be legally liable for investment changes. Employees can opt-out of the program at any time.
“I supported the expansion of Secure Choice as a state legislator because we need to be able to do more for our workers and small businesses,” said Mike Murphy, a former Republican lawmaker from Springfield and current President and CEO of the Greater Springfield Chamber of Commerce.
Enrollment began in 2018 with companies at least two years old and with 500 or more employees. Smaller companies enrolled in phases thereafter to ensure a smooth transition. The success was so strong that most business groups initially neutral or opposed to Secure Choice did not oppose the legislation passed by the General Assembly in 2021 to expand the program. That legislation requires employers with at least five employees to provide a retirement vehicle, or access to Secure Choice, by November 2023.
The access is critical:
- Nearly half of all working-age families have nothing saved for retirement.
- Although Social Security is not intended to be the sole source of retirement income, 23 percent of Illinois retirees rely on Social Security for at least 90 percent of their retirement income.
- Workers are 15 times more likely to save for retirement if they can do so at work.
- However, 40 percent of Illinois private-sector employees work for a business that does not offer a retirement savings plan.
Illinois Secure Choice is managed by Ascensus, a private-sector financial services firm responsible for all recordkeeping and day-to-day aspects. Fund options include BlackRock, Charles Schwab, and State Street Global Advisors. Participants are enrolled in a default target-date Roth IRA with a five percent contribution rate. Participants can choose to change their contribution level or fund option at any time. More information can be found at www.ilsecurechoice.com.
