Mark January 4, 2015, down as a date to remember—one of the greatest legislative wins for families and individuals facing and living in poverty became law in Illinois. Called Secure Choice, it takes what corporate America has known for years, that employees are more likely to save for retirement through a payroll deduction, and provides the same opportunity to millions of Illinois employees whose employers previously never offered such a vehicle. In turn, many more people will retire with economic dignity and not into poverty. Adding to the meager average of $15,228 a year that workers relying on social security alone would each receive, Secure Choice boosts workers’ own savings potential via a payroll deduction that, in turn, immeasurably increases their overall retirement financial health.
This is a victory for all Illinoisans. First, millions previously without access to such accounts now can utilize a payroll deduction to save for retirement. Second, on the cost front, most of the costs of administering the accounts will be funded by the pooled assets of the participants, and all Illinoisans will benefit when more of its citizens are able to fund their own retirements.
Importantly, low-wage workers and persons of colors, who disproportionately have been without access to payroll deduction style retirement savings plans, will now have access to a retirement savings option at their jobs. These groups, who have been traditionally left out on the sidelines, or worse, targeted for predatory banking products, now will have a safe asset building tool that works, which will ultimately increase their wealth over time and help them break the cycle of poverty.
While a handful of other states–Massachusetts, Oregon, California, Maryland, and Connecticut–are at various stages of researching and implementing retirement automatic payroll deduction plans, Illinois’s Secure Choice is the most comprehensive and groundbreaking so far. Remember the words, Secure Choice. We predict that more and more states will implement similar, common sense plans.
A special note of gratitude: In our efforts to support Secure Choice, the Sargent Shriver National Center on Poverty Law was joined by many coalition partners, including AARP, the Illinois Asset Building Group, Heartland Alliance, the Woodstock Institute, and the Service Employees International Union, along with a long list of other community and small business supporters. We thank them for their tireless efforts. On behalf of the communities we represent, we also thank Illinois Senator Daniel Biss and House Representative Leader Barbara Flynn Currie for their unprecedented leadership and Governor Pat Quinn and State Treasurer-Elect Frerichs for their unwavering support of Secure Choice.