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Illinois enacts sweeping solution to retirement savings crisis

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Illinois citizens without access to workplace-based retirement plans will be thrown a lifeline under a new law sponsored by state Senator Daniel Biss (D-Evanston) and signed January 4 by Governor Quinn. The law, which establishes the Illinois Secure Choice Savings Program, seeks to head off an impending crisis resulting from the fact that 2.5 million Illinois workers currently lack access to employer-based retirement plans. It will make Illinois the first state in the union to have a law on the books automatically enrolling such workers into a retirement savings plan.

biss-secure-mr12714-2“More than a dozen states are considering a variety of solutions to the problem of dwindling retirement security,” Biss said. “I’m pleased Illinois is at the forefront of enabling people to maintain dignity and quality of life after they leave the workforce. My hope is that other states would follow our lead in seeking solutions to this pressing and underreported crisis.”

Researchers at the National Institute on Retirement Security estimate that the national retirement savings deficit is at least a staggering $6.8 trillion. One of the major causes of this problem is the huge number of employees who lack access to work-based retirement plans. Secure Choice will tackle this by automatically enrolling most such workers in a portable Roth IRA savings account; those who do not want to participate may opt out of the plan at any time.

“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.”

Learn more about how Secure Choice — which could be implemented as early as June 1, 2015 — will help workers start saving:

 

 

Related: Legislature approves Biss’ Secure Choice savings program (VIDEO)