It is estimated that 2.5 million Illinois workers do not have access to a retirement savings program.
A year ago, Illinois became the first state in the nation to pass a law to address that looming retirement crisis. Spurred, in part, by Woodstock Institute research that showed that 2.5 million private-sector workers in Illinois lacked access to any employment-based retirement savings plan, such as a 401(k), the state passed the Illinois Secure Choice Savings Program.
U.S. Department of Labor (DOL) Secretary Tom Perez announced in Chicago on November 16 a new proposed rule that establishes a safe harbor for state-established and administered programs like Secure Choice, so that employers who are required to participate will not be burdened by federal ERISA laws that apply to employer-sponsored retirement programs. This rule will be critically important in allowing states to implement these programs.
Woodstock’s 2012 research report entitled Coming Up Short illustrated that over 2.5 million private-sector workers in Illinois, in every corner of the state, lack access to a retirement savings plan through their place of employment. Most of these workers are in smaller companies and in industries such as retail and food service that pay low wages and offer few, if any, benefits. We know that this situation holds true in the rest of the country, as well.
This week, the Illinois Senate will vote on SB2758, the Illinois Secure Choice Savings Program. The bill will automatically enroll many workers without access to an employment-based retirement savings plan into the Secure Choice savings program. While workers can opt out of the program, those who do participate will have access to a vital tool that allows them to save for their future.
Chicago, IL — On a vote of nine to five, and one Senator voting "present," the Illinois Secure Choice Program (SB2758) passed out of the Illinois Senate Executive Committee today. The bill will give millions of private-sector workers the opportunity to save their own money for retirement by expanding access to employment-based retirement savings.
The situation at the national level is equally grim. A recent report shows that the median household retirement savings is only $3,000, and more than a quarter of current retirees rely on Social Security as their sole source of retirement income. Without policy solutions that increase savings access and make saving easy, many workers will retire into a significantly reduced standard of living or poverty.
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The negative impact of the lack of adequate retirement savings will fall not only on the individual workers involved; it will also have adverse impacts on the rest of the economy.