We need a retirement system that works for every resident of Illinois.
Our state is facing a looming crisis. More than 2.5 million people are working in Illinois today without access to a retirement savings plan at work. Research shows that we are 15 times likelier to save for retirement if we can do so using a payroll deduction — which means that those who lack access to employer-sponsored savings plans will in many cases be entirely reliant on Social Security.
Unfortunately for this population, Social Security was never intended to be a sole source of retirement income. Indeed, the average Social Security payout per month is $1,281. Unfortunately, in Illinois, the median amount of money in retirement accounts is $3,000. Together, these two numbers tell us that far too many Illinois residents will likely live in poverty when their working days are over. They should not have to choose between paying for groceries, utilities or their prescriptions. They deserve better than that; they deserve a safe, easy way to save for retirement.
This is why we moved the Secure Choice Savings Program through the state Senate. The proposed program would require employers who employ over 25 workers and who offer no retirement plan to automatically enroll their employees with a 3 percent payroll deduction. The employees could opt out at any time or change the contribution level. These retirement accounts are totally portable, and the money would never enter the state treasury but would instead be owned by the worker. The assets would be pooled to ensure low fees and secure investments. Simply put, the plan would make it easy for employees to save their own money for retirement without burdening employers or costing taxpayers a penny.
The program would be overseen by a board chaired by the state treasurer. The bill lays out a simple concept: automatic enrollment in a retirement savings account that belongs to employees and not politicians and is managed by proven private vendors.