Millions more workers would have access to private retirement accounts under a proposal approved Wednesday by the Illinois General Assembly.
The Secure Choice Savings Program would require companies which have at least 25 employees but do not already offer retirement plans to enroll workers automatically in a new type of individual retirement account through payroll deduction.
All the accounts would be pooled together and managed professionally to help keep fees low and performance competitive. Workers will be allowed to opt out of the program.
Bill sponsor State Sen. Daniel Biss, D-Evanston, said it’s intended to bridge a “retirement gap” estimated $6 trillion and $14 trillion.
“That’s the gap between what people say they would like to have saved -- based upon the lifestyle they would like to live in retirement -- and what they have actually saved,” he explained. “This is a crisis coming at us like a freight train, and it will burden individuals and families and government.
“The Secure Choice Savings Program will make it easy for Illinois workers to save without burdening employers or the state,” said Rep. Barbara Flynn Currie, D-Chicago, who sponsored the bill in the House. “This program can make a secure retirement a reality for hard working Illinoisans.”
Biss said Illinois would be the first state to implement this kind of program. The Chicago-based Woodstock Institute reported that 2.5 million workers in Illinois do not have access to retirement savings accounts through their employers.
Some Republicans argued this is another example of Illinois putting more burdens on employers.
Brian Mackey of Illinois Public Radio contributed to this report.