Illinois governor signs private-sector retirement savings act into law
Published: January 5, 2015 - Pensions & Investments
More than 2 million private-sector employees in Illinois will have access to
retirement savings accounts under the Illinois Secure Choice Savings Program
Act, which was signed Sunday by Gov. Pat Quinn.
The act creates an auto-enrollment, payroll-deducted retirement savings
account for private-sector employees whose employers do not offer retirement
plans outside of Social Security, have been in business for at two years and
have 25 or more employees.
Employees who do not opt out of the program would be automatically enrolled
at a contribution rate of 3% on June 1, 2017. Employers will not contribute to
the program.
The funds will be overseen by a seven-member board made up of the state
treasurer, comptroller, director of the Office of Management and Budget or their
designees, and four appointees made by Gov.-elect Bruce Rauner.
gThe state will not have access to the funds as the investments are pooled as
private property of the workers outside of the state treasury,h said a news
release from Mr. Quinnfs office.
An RFP for an external investment manager be issued over the next two years,
and the investment lineup will include target-date funds and perhaps a few other
investment options, state Sen. Daniel Biss, sponsor of the bill, previously told
Pensions & Investments.
gFor many people across Illinois, retirement planning is often a matter of
too little, too late,h Mr. Quinn said in the news release. gWithout an adequate
retirement savings plan, many people are forced to spend their later years
scraping to get by with just Social Security. This legislation protects millions
of private-sector employees in Illinois who work hard but do not have the option
of a retirement plan through their employer.h
The act was passed by the General Assembly on Dec. 3.