Common Questions About Illinois Secure Choice
How many employees trigger the Illinois mandate?
Businesses with 5+ W-2 employees are required to comply with Illinois Secure Choice. Only W-2 employees count — 1099 contractors do not.
What is the penalty for non-compliance?
Illinois employers face fines starting at $250 per employee per year for non-compliance with Illinois Secure Choice, with penalties escalating for continued non-compliance.
Can I be exempt if I already have a 401(k)?
Yes. If your business already sponsors a qualified retirement plan (401k, 403b, SIMPLE IRA, SEP-IRA, or pension), you can apply for a Certificate of Exemption through the Illinois Secure Choice portal at ilsecurechoice.com.
Is it better to enroll in the state plan or get a private plan?
Both options satisfy the mandate. The state plan (Illinois Secure Choice) has no employer setup cost but offers limited contribution limits ($7,000/year IRA limit). A private 401(k) allows contributions up to $23,500/year plus employer match, and may qualify for up to $15,000 in SECURE 2.0 federal tax credits. Many small businesses find a private plan offers better value long-term.