SPRINGFIELD - Democrats in the Illinois General Assembly have introduced legislation that would force Illinois employers to pay into a state-run retirement program if they do not offer retirement plans to their employees. State Senator Dave Syverson (R-Rockford) is adamantly opposed to the idea, writing:
"If Illinois hasn't already made it difficult enough for employers to do business in this state, along comes yet another ill-conceived plan from House and Senate Democratic leaders. The latest plan proposed in HB4595 and SB2758 would create a state-run retirement program that would mandate employers to participate. Here's how it would work:
- Employers would be required to automatically enroll all of their employees in the program unless employee signs a waiver to opt out.
- Employers would be required to deduct at least 3% from their employee's paycheck.
- State would create a new board to operate the "Secure Choice Savings Program."
Syverson argues this is a mandate on employers, not an option, which means employers will be subject to additional administrative costs as well as ERISA and IRS compliance requirements.
- Keeping documentation and records for employees and their contributions will be especially burdensome for those employers with higher turnover.
- The private sector already offers a wide variety of voluntary flexible retirement or 401K options for employers if that is something their employees desire.
- Even in the absence of employer plans, employees have numerous tax deferred retirement savings options available to them.
- We all know this is just the first step; the next step would be to require employers to also contribute or match employee contributions.
"With the way the government has handled the takeover of healthcare and our pension program in Illinois, who really thinks that this is a good idea?" writes Syverson, who says we "don't need to create another government program to fix a problem that does not exist."