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Biss' retirement savings plan a model for other states

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Illinois is setting the trend on helping people save for retirement, with a growing number of states now following its lead and exploring ways to encourage more Americans to put away money for their golden years.

The effort here – called the Secure Choice Savings Program – was led by Illinois Sen. Daniel Biss, D-Evanston, and was featured in the New York Times, which noted Illinois is farther along on this important issue than other states in the nation.

Secure Choice, a state-based retirement savings program, will launch in 2017 to help an estimated 2.5 million Illinoisans who do not have access to the kinds of traditional retirement savings plans offered by many employers.

Experts say retirement savings are critical for an aging population that will live longer than it has in the past. Without a simple, convenient path to save for retirement, many workers – particularly low-wage workers – may find themselves without adequate nest eggs and therefore reliant on taxpayer-supported social safety nets when they leave the work force.

States are beginning to realize the crisis that could occur if they don’t take steps to close the savings gap. Illinois was on the frontlines in December when it approved establishing the Secure Choice Savings Program.

Secure Choice will enable smaller and independent companies to offer retirement savings plans to workers who would not otherwise have access to one. Employees would be automatically enrolled but would have the ability to opt out if they choose to do so.

Three percent of employees’ paychecks would be deducted automatically, with the possibility of saving more if they choose to do so.

“The opportunity to save using a Secure Choice account will prevent many seniors from facing appalling choices — whether to buy food or medication, for example, or whether to live in poverty or continue working despite declining health,” Biss said. “For the first time, millions of Illinois workers will have a better option and more hope for the future.”

Background: How Secure Choice works