Facts about Illinois Secure Choice

Illinois was the first state to pass legislation establishing an auto-IRA, in 2015, and the second to go “live,” in 2018.  In 2022, Illinois’ expanded its program to require employers with 5 to 24 employees and no retirement plan to automatically enroll their workers, who are allowed to opt out.  Previously, the requirement only applied to firms with 25 or more workers.  

To date, Illinois has 7,246 employers submitting payroll deductions and 143,832 workers with funded accounts (see Table 1).

As of January 2024, 7,246 employers in Illinois were submitting payroll deductions to  Illinois Secure Choice in the last 90 days (see Table 2).  Among firms that have registered, not all have completed setting up their payroll systems. 

Employers subject to the mandate that do not comply must pay an annual fine of $250 per eligible employee if noncompliance extends 90 days or more after the notice.  If the period of noncompliance extends past one year, the annual fine rises to $500 per employee.  The program is also open to employers who are not subject to the mandate and self-employed individuals who wish to participate. 

To date, the number of employees with assets in Illinois Secure Choice has reached 143,832.  Given the early stage of the program, average account balances are modest.  Contributions made in the first 90 days are invested in a money market fund; after that point, the account balance and future contributions are defaulted into a target date fund.  As of the most recent month, 40 percent of eligible workers chose to opt out of participating (see Table 3).

The program, which is intended to eventually become financially self-sufficient, had assets under manage­ment of $158.8 million by the end of January 2024 (see Table 4).  To pay for its operating costs, Illinois Secure Choice charges an annual fee of approximately 0.75 percent on program assets.