My Illinois Savings Explained: Timeline, Requirements, & Specifications

Illinois employers have retirement responsibilities on their radar thanks to My Illinois Savings. Under the state’s retirement mandate, certain employers that don’t already offer a qualifying plan must make a move soon if they haven’t already.

Thankfully, employers don’t have to take a one-size-fits-all approach to staying compliant.

While the program is aimed at expanding employees’ ability to building retirement savings and can be effective for businesses, employers also have other options with other types of qualifying plans, like a 401(k). So, compliance doesn’t just start with understanding whether the mandate applies to you and what actions are required. It also means considering whether a state-facilitated program is right for your business or if another option may better support your goals.

Let’s dive into everything you need to know about My Illinois Savings below.

What is My Illinois Savings and How Does it Work?

My Illinois Savings, which used to be known as Illinois Secure Choice, is a state-run retirement savings program designed to give more Illinois workers access to building their retirement savings.

The program targets their employers, who facilitate the program. It uses payroll deductions to help eligible employees contribute to their own Roth individual retirement accounts (IRAs). Employees are automatically enrolled but can opt out or change their contribution elections at any time.

My Illinois Savings Registration Deadlines

Illinois phased in its retirement mandate based on employer size. While the original registration deadlines have already passed, it’s still important to understand the rollout to know if your business became subject to the requirement and need to decide on signing up or qualifying for an exemption.

What Do Illinois Employers Need to Know About My Illinois Savings?

For employers, the most important questions about the Illinois retirement mandate revolve around whether it applies to your business, what you’re responsible for, and what happens if you don’t comply.

Which Illinois Employers are Required to Participate?

My Illinois Savings has three main factors that determine if an employer must participate in the program or not:

• If the employer has been in business for at least two years  

• If they have had at least five Illinois employees in every quarter of the previous calendar year

• If they don’t already offer or contribute to a qualified retirement plan

Employers that already offer a qualifying plan like a 401(k) generally don’t need to sign up for My Illinois Savings but will need to confirm their exemption.

What are Employers Responsible For?

Employers that have to facilitate the program have various responsibilities, including:

• Registering for My Illinois Savings itself

• Providing information about eligible employees

• Setting up and processing employee payroll deductions

• Sending employee contributions to the program

• Keeping employee information current

Employers don’t have to worry about contributing to employee accounts, paying program fees, or managing employees’ investment decisions

What Happens if an Employer Doesn’t Comply?

Under Illinois law, employers that fail to comply may face penalties. These penalties can generally reach $250 per employee for the first year of noncompliance, and $500 per employee for each subsequent calendar year.

If you’re unsure if your business is required to follow the mandate or not, it’s worth confirming with a program expert and taking action rather than letting the possible consequences add up.

Can Illinois Employers Offer a 401(k) Instead of the State Option?

In short, yes, Illinois employers don’t necessarily have to participate in My Illinois Savings. They are able to meet the state’s requirements by instead offering a qualified employer-sponsored retirement plan.

In fact, many Illinois employers started offering a 401(k) instead of going with the state-run program, which still keeps them compliant. Because the Illinois mandate generally applies to businesses that have at least five Illinois employees in every quarter of the previous calendar year, have been operating for at least two years, and don’t currently have a plan, offering a qualified retirement plan now keeps them from being subject to any penalties that might have occurred if they would’ve waited or not signed up or a plan at all.

So, the bigger point here is that My Illinois Savings isn’t the only path forward. A 401(k) can also satisfy the state requirement while giving businesses more control of the benefit they are offering.

Is My Illinois Savings Right for Your Business?

My Illinois Savings can provide a straightforward way to meet the state’s retirement requirements, but it’s not the only option to consider.

Compared with My Illinois Savings, a 401(k) can offer:

• Higher employee contribution limits: $24,500 for a 401(k) in 2025, compared with $7,500 for an IRA.

• Employer contributions: Businesses can offer matching or other employer contributions with a 401(k), while they wouldn’t be able to with My Illinois Savings.

• More plan flexibility: Employers can have more control over valuable features like plan design, eligibility, and investment options.

• A more customizable benefit: A 401(k) can be designed around your business and workforce, rather than simply meeting the state requirement.

Ultimately, there isn’t one right decision, and whatever you choose depends on your goals. But, if you’re looking for more savings opportunities, employer contributions, or plan flexibility, you might find that a 401(k) would work better for you. Here’s more of a breakdown that you can keep handy:

How Ubiquity Can Help Illinois Employers

The most important part for employers to take out of everything here is that they aren’t limited to settling for a one-size-fits-all solution. There are multiple options for them to utilize so that they can make sure they are making the best choices for their business.

Ubiquity offers flat-fee, customizable 401(k) plans built for small businesses, giving Illinois employers a valuable alternative to My Illinois Savings while helping employees save more for retirement. Our solutions go beyond just checking the compliance box thanks to flexible plan designs, payroll-agnostic options, and broad investment and savings features that allow you to build a benefit that actually works around you and your team.

Ready to explore your retirement plan options? See how a Ubiquity 401(k) can help you today!

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