SPRINGFIELD, Ill., March 20, 2014 /PRNewswire-USNewswire/ -- Today, the Senate Executive Committee took a positive step toward helping to ensure that workers in Illinois can secure their financial futures. The committee passed Senate Bill 2758 – the Illinois Secure Choice Savings Program. The bill, sponsored by Sen. Daniel Biss provides a simple retirement savings opportunity to over 2.5 million workers in Illinois who do not currently have access to an employer-based retirement savings plan. The bill is sponsored in the House by Rep. Barbara Flynn Currie (House Bill 4595).
"Over 53% of the private-sector workforce in Illinois does not have access to a retirement savings plan through work," said Bob Gallo, AARP Illinois State Director. "The Illinois Secure Choice Savings Program creates real possibilities to help encourage private savings so more people can live independently as they age, relying less on government safety-net programs."
Senate Bill 2758 would provide an Individual Retirement Account (IRA) plan for businesses that have 10 or more employees that have been in business more than two years. The program enables businesses to facilitate employee savings without having to sponsor a plan, comply with ERISA requirements or make matching contributions. Workers would be automatically opted-in to an account, but could opt-out at any time, and the accounts would be portable.
"With private sector workers, especially low-wage workers, increasingly lacking access to retirement plans, Illinoisans face a severe and growing risk of retiring deep into poverty," Biss said. "Senate Bill 2758 is the solution that's least burdensome to government and businesses that will allow more workers access to safe, portable and affordable ways to save and invest."
"The Secure Choice Savings Program will help small businesses like mine compete with larger employers that offer retirement packages and will help us attract and retain highly qualified employees so that our businesses are sustainable," said Excell Lewis, owner of XL Academics, a small technology company based in Rockford.
Nationally, 45% of working-age households have no retirement savings and the average Social Security benefit in Illinois is only $1,281 per month. Research has shown that people are more likely to save for retirement if they can do so through work. Over 71% of workers participate in a retirement savings plan when it is offered by their employer – and less than 5% save if their employer does not offer a plan. In addition, automatic enrollment in retirement savings plans have been shown to increase participation in those plans to 90-95%.
"AARP is committed to ensuring that Illinois workers have the tools they need to be financially secure in retirement," said Gallo. "We applaud the Senate Executive Committee for passing this legislation and we urge the full Senate to follow suit."
The Illinois Secure Choice Savings Program is supported by AARP Illinois, Shriver Center, Woodstock Institute, Heartland Alliance, SEIU and over 30 other business, association and advocacy groups.
SOURCE AARP Illinois