The Illinois Secure Choice employer guide you need: Illinois’s state retirement mandate is active and enforced, covering all private-sector businesses with 5 or more W-2 employees. If your Illinois business hasn’t registered or obtained an exemption, you’re accumulating $250/employee/year in fines right now.
Illinois Secure Choice: Program Overview
Illinois Secure Choice is one of the nation’s first state retirement savings mandates, launched to address the significant retirement savings gap among private-sector Illinois workers. The program requires employers to either enroll workers in a state-administered Roth IRA (facilitated through ilsecurechoice.com) or offer a qualifying private retirement plan.
Key facts:
- Employee threshold: 5 or more W-2 employees
- Penalty: $250/employee/year, escalating with continued non-compliance
- Status: Active and fully enforced
- Portal: ilsecurechoice.com
- Default contribution: 5% of gross wages (employee-paid, not employer)
Who Must Comply with Illinois Secure Choice?
Illinois Secure Choice applies to:
- Private-sector for-profit businesses with 5+ W-2 employees
- Non-profit organizations with 5+ W-2 employees
- Businesses that have been operating for 2+ years
The following are exempt (without filing): federal government employers, state and local government employers, and businesses with qualifying private retirement plans (but they must still file for exemption).
Illinois Secure Choice Penalties
Non-compliant Illinois employers face:
- Initial penalty: $250 per employee who should have been enrolled
- Escalating penalties: Fines increase with continued non-compliance
- Penalties accumulate until the employer registers or obtains a Certificate of Exemption
For a 15-person Illinois business, the first-year penalty would be $3,750. This exceeds the cost of a compliant private retirement plan in many cases.
Qualifying Exemptions: Plans That Satisfy Illinois Secure Choice
If your business offers any of the following, you can apply for a Certificate of Exemption at ilsecurechoice.com:
- 401(k) plan
- SIMPLE IRA
- SEP IRA
- 403(b) plan
- Defined benefit pension
- 457(b) plan
Important: Simply having the plan is not enough. You must actively file a Certificate of Exemption through the Illinois Secure Choice portal.
How to Enroll in Illinois Secure Choice: Step-by-Step
- Visit ilsecurechoice.com and create your employer account
- Enter your EIN and business information
- Upload your eligible employee list (W-2 employees 18+)
- Configure payroll deductions for the default 5% contribution rate
- Send required employee notices explaining Illinois Secure Choice and the opt-out window
- Submit your enrollment and save your confirmation
Should Illinois Employers Use the State Plan or a Private Plan?
Both options satisfy Illinois Secure Choice. The state plan (Roth IRA) has no employer cost but limits contributions to $7,000/year. A private 401(k) allows up to $23,500/year, offers employer matching, and may qualify for SECURE 2.0 credits up to $15,000. For businesses focused on talent retention, a private plan often delivers more value.
Read the full guide: Illinois Secure Choice Compliance Guide
View Illinois state details: Illinois State Mandate Overview
This content is for educational purposes only and does not constitute financial, tax, legal, or investment advice. State requirements and penalties are subject to change. Consult a qualified professional before making compliance decisions.
