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Heather Palermo
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ILLINOIS BUSINESS OWNERS
A retirement savings program is mandatory as of November 2019.
You have options, and we can help. Please contact us today!
Effective November, 2019, The Illinois Secure Choice Savings Program Act (Secure Choice), will require Illinois businesses to automatically enroll their employees in the savings program if they have at least 25 employees, have been in business for at least two years, and do not provide a qualified savings plan of their own. Businesses who meet these specifications will either need to implement a retirement plan through providers of their choice or will need to enroll employees in Secure Choice’s Roth IRA. Please note: Secure Choice has already been implemented for companies with more than 100 employees.
Employers who meet the specifications above that do not comply with the Illinois Secure Choice Savings Program can be subject to hefty penalties as outlined in the act.
Setting up a retirement plan prior to Secure Choice implementation is a good option to consider. Here’s why:
- Time. You will be required to enroll every employee, set up payroll deductions, send educational material, and remit employee contributions to the provider. These time-consuming tasks are done for you, by service providers, when you utilize an advisor.
- Tax benefits. With a Roth IRA, contributions are taxed now, meaning the benefit of deferred taxation isn’t applicable. In addition, you will miss out on the tax benefits from matching employee contributions.
- Limited contributions. Roth IRAs have stricter contribution limits. The limit for 2019 is $6,000 ($7,000 if age 50 or over).
- No advisor. Financial advisors are not required under the Secure Choice model, leaving your employees without the guidance to make an informed decision that is in their best interest.
Again, now is the time to consider your options. Don’t wait until November when Secure Choice is implemented. We can help you now! We have financial advisors on staff who would love the opportunity to talk with you and discover the best plan for you and your employees!
Your Payroll Department (YPD) is part of the Kaizen CPAs family. YPD specializes in payroll and HR compliance for small businesses, providing the hands-on support to get your people paid and stay compliant without having to become an expert yourself.
The information in this article is provided for general educational purposes and reflects conditions as of the publication date. It does not constitute legal, tax, or compliance advice. For guidance specific to your business, consult a qualified professional.
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