Illinois Secure Choice Retirement Mandate

Is Your Business in Compliance with Illinois’ Retirement Plan Law?

If you own a business in Illinois with 5 or more employees, the state now requires you to offer a retirement plan. The program, called Illinois Secure Choice, is a state-run Roth IRA designed to help employees save-but it may not be the best fit for every business.

At Juncture 401k, we help employers in the Chicago metro and beyond understand their compliance obligations and explore smarter retirement plan alternatives.

 
 

Who Must Comply & When

Number of Employees Deadline to Comply
25+ Passed (Nov 2022)
16-24 Passed (Nov 2023)
5-15 Passed (Nov 2024)
 
 

What Are the Penalties for Not Complying?

Illinois can fine non-compliant businesses up to:

  • $250 per eligible employee in year one

  • $500 per employee in subsequent years

That adds up fast-even for small teams.

 
 

Secure Choice vs. 401(k): Which Makes More Sense?

Illinois Secure Choice 401(k) Plan (Private Provider)
Plan Type Roth IRA Traditional + Roth 401(k)
Contribution Limits $8,000 (age 50+) $31,000 (age 50+); up to $77,500 total
Employer Match Not Allowed Optional Match/Profit-Sharing
Investment Options State-Selected, Limited Broad, Customizable
Fiduciary Coverage State Oversees Administration 3(16) & 3(38) Services Available
Tax Credits None Up to $16,500 via SECURE Act 2.0
Branding & Control Generic, state-run Branded to your company + flexible

A 401(k) gives your business more control, higher savings potential, and greater value for your team-without adding complexity.

 
 

How We Help Illinois Business Owners

  • Determine your compliance requirements

  • Compare Secure Choice vs. 401(k)

  • Set up a low-cost, easy-to-manage 401(k)

  • Offer fiduciary protection

  • Educate employees in clear, practical language

Whether you’re out of compliance or looking to upgrade from Secure Choice, we make retirement planning simple and strategic.

 
 

  • Yes, if you have 5 or more employees, have been in business for at least 2 years, and do not currently offer a qualified retirement plan (such as a 401(k), SIMPLE IRA, or SEP IRA), you are required to comply with the Illinois Secure Choice mandate,.

  • Businesses that do not register or certify exemption by their assigned deadline may face penalties of $250 per eligible employee in the first year, and $500 per employee in subsequent years. These penalties are assessed annually by the Illinois Department of Revenue.

  • Yes. If you already offer a qualified retirement plan like a 401(k), you can certify your exemption through the Secure Choice employer portal. You are not required to enroll in the state-run IRA program if you already meet the mandate through a private plan.

  • The final rollout deadline was November 1, 2024 for businesses with 5 to 15 employees. Employers with 16+ employees should already be enrolled or exempt. IF you’re unsure of your deadline or status, we can help walk you through it.

  • No. The Secure Choice program is a Roth IRA-based plan that only allows employee contributions through payroll deductions. Employers are not permitted to match contributions or add funds to employee accounts.

  • Your main alternative is to offer a qualified retirement plan, such as a 401(k). These plans provide:

    • Higher contribution limits

    • Optional employer matching

    • Broader investment choices

    • Tax credits of up to $16,500 for eligible employers

    Many small businesses find a 401(k) to be a more flexible and competitive benefit for their employees compared to the state-run IRA.

Not Sure Where to Start? Let’s Simplify Compliance

We’ll help you check your status, weigh your options, and set up the right plan for your team.