It is estimated that 2.5 million Illinois workers do not have access to a retirement savings program.
Woodstock Institute strongly supports creating a safe harbor for employers that are mandated to participate in state-established and administered automatic enrollment payroll deduction retirement savings programs, and we encourage the DOL to expand the safe harbor to employers that voluntarily participate in those programs.
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.
While the impact of biased investment advice in the college savings arena is very troubling, the impact of biased investment advice is even more concerning in the area of retirement savings. The lack of a fiduciary standard for retirement investment advisors costs consumers $17 billion a year in unnecessary fees to manage 401(k) and other retirement funds such as Individual Retirement Accounts (IRAs). The Obama Administration and U.S.
Producer Kim Jacobs will join the panel to discuss her film, which reveals what can happen to older adults when they are targeted for scams and abusive financial products. The film also reveals how they are fighting back, and becoming powerful advocates for themselves and others to help change the current landscape of economic security for older Americans. We met Kim when “Fleeced” was shown at the National Community Reinvestment Coalition (NCRC) conference in Washington, DC, in March. We are delighted she offered to drive in from Indianapolis to join us for the event.
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.
A 2012 Woodstock report found that more than half of private-sector workers in Illinois—over 2.5 million—lack access to an employment-based retirement savings plan. Without individual savings, many retirees who rely solely on Social Security benefits will face the prospect of retiring into poverty.