The proposed changes are aimed at increasing participation in the Secure Choice program, which is designed to help private-sector employees save for retirement in an efficient and low-cost manner. By allowing employees to make contributions from different employers into a single account, the bill supports the diverse employment scenarios of modern workers, such as gig work and job transitions. This flexibility is anticipated to facilitate higher overall savings rates for Illinois workers while also aligning with IRS regulations related to IRAs.
Summary
House Bill 1435, introduced by Rep. Gregg Johnson, amends the Illinois Secure Choice Savings Program Act. The bill aims to clarify and extend provisions related to the establishment and operation of Individual Retirement Accounts (IRAs) under the Secure Choice program. It specifies that the accounts are owned by the enrollees and can be funded through contributions from multiple employers, making the accounts portable. It allows enrollees to hold both Roth IRAs and Traditional IRAs, which enhances the program's flexibility for personal retirement savings management.
Contention
One notable aspect of the bill is the introduction of penalties for employers who fail to comply with enrollment procedures. If enacted, this will enforce mandatory participation in the program, potentially fostering compliance but also raising concerns among businesses about the implications of increased regulatory requirements. Critics may argue that such mandates could impose additional burdens on small businesses, which may be wary of administrative costs associated with compliance. The bill’s automatic enrollment feature is designed to improve the enrollment experience but has raised discussions regarding its influence on employee choice and employer responsibilities.
Retirement: other; retirement program for certain nonpublic employees to participate in a benefit plan; create, and provide oversight. Creates new act.