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 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. Without employer-sponsored savings plans, too many will be solely reliant on Social Security.
Unfortunately for this population, Social Security was never intended to be a sole source of retirement income. The average Social Security payout per month is $1,281, and the median amount of money in retirement accounts in Illinois is $3,000. We have far too many Illinoisans likely to live in poverty when their working days are over.
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This is why we moved the Secure Choice Savings Program (SB 2758) through the state Senate and now need it to pass the House. The program would require employers with more than 25 workers and no employee retirement plan to automatically enroll employees and take a 3 percent payroll deduction, through totally portable accounts. Employees can opt out or change the contribution level any time. The state treasurer would chair a board overseeing the program, with assets pooled to lower fees and secure investments. But the money would always be owned by the worker.
The concept of retirement savings accounts, with automatic enrollment, owned by employees and managed by proven private vendors -- not politicians -- is an important one. Secure Choice should be embraced in Springfield. The treasurer's office will protect every dime. Businesses and taxpayers won't bear any meaningful costs. And, most importantly, millions of Illinois residents will have new reason to be hopeful for a meaningful, secure retirement after a lifetime of hard work.
State Sen. Daniel Biss
State Sen. Michael Frerichs