Here are some details you’ll need to know about the Illinois Secure Choice Program:

• Income limits: If employees earn too much, they are not eligible for the program. It’s also not an effective vehicle for those who are close to retirement.
• Contribution limits: Far lower than a 401(k), Roth IRAs only allow contributions of $6,500/yr (in 2023). If an employee has an additional private IRA, they’ll need to track these limits themselves.
• Matching funds: Employers are barred from making matching contributions to employee accounts.
• No Protection: The Illinois program is not subject to worker protetctions under ERISA, which requires fiduciary oversight, plan information to be provided to participants, and the establishment of a grievance and appeals process.
• No Tax Benefit for Employees: Since Roth IRA contributions are made post-tax, workers looking for more immediate tax benefits will not get them. By contrast, 401(k) plans offer both pre- and post-tax contributions.
• Poor Investment Options: The small selection of investments available to Illinois employees may not be suitable for everyone. And, the default age-based target-date funds have been underperforming and may not be very helpful in accomplishing wealth building.
• Fees to Employees: Participants pay about 0.75% per year, higher than the average 401(k) fee of 0.45%-0.50%. And, fees are likely increase over time.