There's a much better alternative to the MarylandSaves retirement plan.

Look closely at the details and compare them to a 401(k) plan from 401GO.

MarylandSaves vs 401k

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.
  • No Proven Effectiveness: Oregon was the first state to mandate a secure choice plan, which began in November 2017. By April 2020, the average account balance of it’s 67,000 participants was only about $750. This calls into question how useful these plans really are for encouraging retirement readiness.

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    401GO is an automated 401(k) solution that simplifies plan administration and day-to-day management for small businesses. We offer a fast 15-minute setup, financial wellness tools for employees, and best-in-industry customer support. Find out why the customers who use us stay! 

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