To help the many employees who lack access to a retirement savings plan, Illinois has created a state-sponsored program known as Secure Choice. Certain employers are required to participate or offer another qualified plan on their own. Initially, the mandate applied only to businesses with 25 or more employees, but a recent amendment expanded it to those with five or more employees. These employers need to understand how Secure Choice works and compares to other plans in the private market so they can make an informed decision about what’s best for their organization.

What is Illinois Secure Choice?

Illinois Secure Choice is a retirement savings program that’s part of a larger state-wide retirement mandate. Employers who meet the eligibility criteria must either enroll their employees in Secure Choice or sponsor a qualified plan through the private market.

Illinois Secure Choice Retirement Savings Program

Why is Illinois sponsoring their own retirement plan?

Studies have shown that a large portion of employees do not have a retirement savings plan through their employer and, therefore, lack the funds needed to retire comfortably. Illinois Secure Choice, like other state-sponsored plans, intends to reverse this trend.

How does Illinois Secure Choice work?

Illinois Secure Choice is a Roth Individual Retirement Account (IRA), which means employees contribute to the plan via post-tax payroll deductions. When they experience a qualifying distribution event, such as retirement, they generally can draw from their savings on a tax-free basis.

What are the features of the IL Secure Choice plan?

  • Employees are automatically enrolled, but can opt out at any time
  • The default contribution rate is 5% of gross pay
  • Contribution rates automatically escalate up to 10%
  • Loans from the plan are not permitted

What employers need to know about the Illinois Secure Choice plan

When deciding if Secure Choice is right for their business and their employees, employers may want to consider the following:


Businesses are required to participate in Secure Choice if they:

  • Have been in operation for at least two years
  • Employed five or more people in every quarter of the previous year
  • Did not sponsor a qualified retirement savings plan in the last two years


Employers are prohibited from contributing to Secure Choice and employees may only contribute a maximum of $6,000 per year. If they’re age 50 or older, the annual limit is $7,000.

Enrollment dates

The Secure Choice enrollment deadline for businesses with more than 25 employees has passed. Employers with 16 to 24 employees have until September 1, 2022 to enroll and employers with 5 to 15 employees have until September 1, 2023.


Businesses that qualify for Secure Choice and don’t enroll their employees by the appointed deadlines or offer another retirement plan may be fined by the state. The penalty for one year of non-compliance is $250 per eligible employee; each year thereafter is $500 per eligible employee.

Can businesses opt to participate in a different retirement plan?

Yes, businesses that prefer not to participate in Secure Choice may sponsor a retirement plan on their own. Qualified options include:

  • 401(a) or 401(k)
  • 403(a) or 403(b)
  • 408(k) or 408(p)
  • 457(b)
  • Taft-Hartley plan

What are the pros and cons of Illinois Secure Choice?

For businesses that don’t have the budget or the resources to sponsor a retirement plan on their own, Secure Choice may be a good option because:

  • Registration is easy
  • There are no fees charged to the business
  • Employers have a limited role in plan administration
  • Retirement plans help attract and retain talent

Yet, even with minimal responsibilities, plan administration can sometimes be burdensome.

What do employers need to do to administer the Illinois Secure Choice plan?

Businesses that participate in Secure Choice generally must perform the following tasks:

  • Send an annual employee census to the state
  • Track which employees are eligible for the plan
  • Distribute enrollment information to new hires within 30 days
  • Automatically enroll employees at the default contribution rate
  • Track and honor opt out requests
  • Process contributions via payroll deductions each pay period

How does the Illinois Secure Choice savings program compare to other retirement plans?

ADP designs retirement plans that work better

Features IL Secure Choice IRA ADP 401(k) ADP SIMPLE ADP SEP
Auto Enroll Mandatory 5% Available Available N/A
Auto Escalation N/A Available N/A N/A
Payroll Integration Manual via website or FTP Full integration Full integration N/A
Investment Option Limited Broad range of funds 65+ options 65+ options
Investment Advice N/A Available Available Available
Taxability Roth after-tax contributions Pretax & Roth contributions Pretax contributions Pretax contributions
Annual Contribution Limit $6,500 employee contributions + $1K catchup (over 50) $23,000 employee contributions + $7,500 catchup (over 50) + optional employer contributions $16,000 employee contributions + $3,500 catchup (over 50) + employer contributions 25% of total compensation up to $66,000 (all employer contributions)

Frequently asked questions about IL Secure Choice

What are the IL Secure Choice investments and who manages them?

Depending on their savings goals, employees enrolled in Secure Choice may invest in a target retirement fund, capital preservation fund, conservative fund or a growth fund. Ascensus, an experienced retirement and college savings services provider, manages the program.

Is Illinois Secure Choice mandatory?

Participation in Illinois Secure Choice is mandatory only if a business meets the eligibility criteria and does not sponsor a retirement savings plan on its own.

What if my business already has a retirement plan?

Employers who offer a retirement plan that is qualified under the Internal Revenue Code are not required to join IL Secure Choice, but must register for exemption.

This information is intended to be used as a starting point in analyzing retirement plans and is not a comprehensive resource of all requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.

Unless otherwise agreed in writing with a client, ADP, Inc. and its affiliates (ADP) do not endorse or recommend specific investment companies or products, financial advisors or service providers; engage or compensate any financial advisor or firm for the provision of advice; offer financial, investment, tax or legal advice or management services; or serve in a fiduciary capacity with respect to retirement plans. All ADP companies identified are affiliated companies.

ADP Editorial Team

ADP Editorial Team The ADP editorial team is comprised of human resource professionals with extensive experience solving complex HR challenges for businesses of all sizes.