Action May Be Required Soon for Your Chiropractic Office

[Editor’s Note: This is an update to an article first published on August 31, 2022.]

The Office of the Illinois State Treasurer has begun sending notices to businesses that may have to register for participation in the Secure Choice Savings Program.  Secure Choice is a State of Illinois-administered retirement savings program for Illinois private-sector employees who lack access to an employer-sponsored plan.  If you employ between 5 and 15 employees, by law you must register to enroll in the program by November 1, 2023, or request an exemption because you already offer a qualified retirement plan to your employees.

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This program does NOT require employer contributions or fees. It only requires registration and payroll withholding (and submission) from employers that do not currently have a qualified retirement program.

The ICS sent the first alert regarding this program in August of 2022. 

Those businesses that employ less than five employees are exempt from participation in the program.

What Do You Need To Do?

• If you employ 5-15 employees, you must register with Secure Choice by November 1, 2023
• If you already offer a qualified retirement plan to your employees, request an exemption from participation
• If you do not offer a qualified retirement plan to your employees, enroll all employees who choose to participate in the program
• Be prepared to facilitate payroll deductions each payroll through a bank transfer by those deadlines
• The Secure Choice Savings Board can supply you with a packet of information for employees who choose to enroll in the savings program

What Counts as a Qualified Retirement Plan that Allows Employers to be Exempt from Participation?

Examples of a qualified retirement plan would include an Individual Retirement Account (IRA), 401 (k) plan, 403 (b) plan, or other similar retirement savings vehicles. If you already offer such a program to your employees, you will be exempt – but you still have to register by November 1 to apply for the exemption!

If you do not currently offer a retirement program to your employees, you will either have to establish a retirement program or enroll in the Secure Choice Savings Program.

How Does this Impact Your Business Operations?

The employer would have to provide payroll deduction retirement arrangements for those employees who choose to participate in the Secure Choice program, and deposit on behalf of those employees, the withheld funds into the program. The law does not require any matching funds from the employer, but the employer may incur some costs related to administrative time (notification, payroll setup, sending withheld funds, etc.).

There are penalties for non-compliant employers who meet the requirements for participation in the savings program.. An employer who fails to enroll an employee in the program within the time prescribed will face a penalty of $250 per employee for the initial calendar year of non-compliance, and $500 per employee for each subsequent year of non-compliance. Employers, if penalized with the above sanctions, may file a written protest against the assessment, setting forth the grounds on which such protest is based.

Background

The program, created by state law and launched in 2018, is being phased in. Larger businesses, those with over 25 employees, have been operating under this requirement since 2019. Businesses with 16-24 employees had to comply by November 1, 2022. This last phase includes the businesses with 5-15 employees. An employer is defined as “an entity engaged in a business, industry, profession, trade, or other enterprise in Illinois, whether for profit or not for profit, that has employed at least five employees during every quarter of the previous calendar year, and has been in business at least two years.”