Did you know that Illinois-based businesses with more than 25 employees will be forced to enroll their employees in a state-run retirement plan, unless you offer one yourself? The Illinois Secure Choice Savings Program Act was signed into law in January 2015 and is expected to be enforced starting in 2017.
While the idea of offering a retirement option to employees is appealing to all, there may be a less burdensome and more cost effective way for small business employers to offer this benefit without enrolling in a mandated state-run program. For example, Tandem HR – a Chicago area PEO – offers their small and mid-sized clients a multiple employer retirement plan. This allows their clients to avoid the state’s involvement, while offering a very attractive savings program.
The top 3 benefits to adopting a multiple employer retirement plan vs. the state sponsored option:
- Time savings: Tandem HR (as the plan sponsor and administrator of the multiple employer plan) is responsible for account set up and for transmitting contributions to employees’ retirement accounts. When the state runs your plan, you are responsible for these time consuming tasks!
- Cost savings: The fees associated with the multiple employer plan are paid by the participating employees. Still, the employee fees will prove very competitive compared to the anticipated plan fees listed in the initial state-sponsored Secure Choice program materials.
- Flexibility: Multiple employer plans include the ability to customize many investment features including eligibility requirements, employer matching and vesting. The state-sponsored option does not allow for pretax savings or discretionary employer contributions. Additionally, it requires the plan to be setup with automatic enrollment.
Tandem HR is a Professional Employer Organization (PEO) in the Chicagoland area that assists hundreds of small and mid-sized businesses save time and money while growing their business, by taking on the administrative tasks associated with human resources, benefits, payroll, tax administration, regulatory compliance and risk management.
For more information on Tandem HR or PEOs, visit TandemHR.com or call 630.928.0510.
For more information on the Illinois Secure Choice Savings Program, visit http://illinoistreasurer.gov/Individuals/Secure_Choice