On August 9th, 2019 Illinois Governor J.B. Pritzker approved a bill amending the Illinois Secure Choice Savings Program Act. According to the Illinois General Assembly website, here is an overview of the changes made, effective immediately:
- Provides that an investment option may be a conservative fund rather than a conservative principal protection fund.
- Provides that the Illinois Secure Choice Savings Board may establish deadlines for payment of payroll deductions to the Fund and enter agreements to permit residents of other states to participate in the program.
- Includes a traditional IRA within the definition of the term "IRA".
- Provides for audits on a fiscal year basis rather than a calendar year basis and report by the following January rather than July.
- Requires the Treasurer to prepare annual reports on benefits provided by the Program and post the report on the Program website.
As you can see, the program has already become more cumbersome and complicated. Look for future blog posts as we dig into the final bill, but for now here’s our initial reaction. While we support the effort to include a traditional IRA option, the consequence means the payroll function has become more complicated as now both after-tax and tax deferred savings will need to be accounted for on employee paychecks. Expanding the investment options is a fantastic idea. We recently did a blog post on just how bad the current investment offering is and the need for improvement. Permitting out of state residents only provides more costs, confusion, and strain on the employer. It's hard enough trying to track down an employee to return paperwork in the same building, let alone a different state. We are concerned about the deadlines for payroll deductions as there is still a need for clarity on the process, timing, and repercussions of untimely submissions.
Questions?
If you have any questions, need additional information, or would like to talk about other retirement plan options, please do not hesitate to contact Associated Pension Services, Inc. We have been involved in the retirement plan administration business for over 30 years, helping small business owners and HR managers like yourself navigate, establish, and implement retirement solutions. You don't need to go at this alone.
Frederic (Eric) Hoffman, IV, AIF®, CPFA, APR, RICP®
(847) 400-7882
ehoffman@associatedpensionservices.com