Active mandate
Illinois Retirement Plan Mandate: Requirements for Employers
My Illinois Savings (formerly Illinois Secure Choice)
My Illinois Savings — the rebranded Illinois Secure Choice program — covers employers with 5 or more employees in every quarter of the prior year, in business 2+ years, with no qualified plan. All registration waves have closed and penalties have been enforced by the Illinois Department of Revenue since February 2023.
How the My Illinois Savings (formerly Illinois Secure Choice) program works
Illinois' retirement mandate began as Illinois Secure Choice and now operates as My Illinois Savings. It covers employers with five or more employees during every quarter of the prior calendar year that have been in business at least two years and do not sponsor a qualified retirement plan. The employer-size threshold was lowered from 25 to 5 in 2021, pulling tens of thousands of smaller businesses into scope.
All five registration waves have closed — the final wave, for employers with 5 to 15 employees, ended November 1, 2023. Illinois is also one of the strictest enforcement environments: penalties have been operable since February 2023 and are administered by the Illinois Department of Revenue under 820 ILCS 80/85. Non-compliance costs $250 per eligible employee for the first calendar year and $500 per employee for each subsequent year — and non-consecutive years still count toward the higher tier. The program does send reminders roughly 120 and 30 days before an employer's deadline, but missing them has real consequences.
Enrolled employees are placed in a Roth IRA at a 5% default rate with annual auto-escalation up to 10%. Employers facilitate deductions; sponsoring any qualified retirement plan instead — 401(k), 403(b), SEP, or SIMPLE — exempts the business from the program.
The Illinois mandate at a glance
Registration deadlines
All five registration waves have passed (final 5–15 employee wave closed November 1, 2023). The program sends reminders roughly 120 and 30 days before an employer's deadline.
Covered employers
Employers with 5 or more employees during every quarter of the prior year, in business 2+ years, with no qualified plan. The threshold was lowered from 25 to 5 in 2021.
Penalties / enforcement
$250 per eligible employee for the first calendar year of non-compliance; $500 per employee for each subsequent year — non-consecutive years still count toward the higher tier (820 ILCS 80/85). Enforced by the Illinois Department of Revenue; penalties operable since February 2023.
Who must comply in Illinois — and what is required
Employer requirements
Register with My Illinois Savings by the assigned wave deadline (all waves have now closed) and facilitate payroll deductions for enrolled employees, or maintain a qualifying retirement plan.
Employee eligibility
Eligible employees are enrolled automatically unless they opt out; enrollment is administered through the My Illinois Savings program.
Exemptions
Employers sponsoring any qualified retirement plan; employers under the 5-employee or 2-year thresholds.
Penalties and enforcement
$250 per eligible employee for the first calendar year of non-compliance; $500 per employee for each subsequent year — non-consecutive years still count toward the higher tier (820 ILCS 80/85). Enforced by the Illinois Department of Revenue; penalties operable since February 2023.
Qualifying retirement plan alternatives in Illinois
Sponsoring any qualified retirement plan — 401(k), Safe Harbor 401(k), 403(b), SEP, or SIMPLE — exempts an Illinois employer from My Illinois Savings. With Department of Revenue enforcement active, a qualifying plan is also the route that puts contribution matching and plan design under your control.
Start a new 401(k)
Design a plan around your workforce — matching, Roth options, vesting, and federal startup tax credits.
Start a new planUpgrade an existing plan
Confirm your current plan qualifies, then tune its design so the mandate works in your favor.
Upgrade my company’s planFull plan administration
LRS handles compliance testing, filings, and day-to-day administration so the plan stays qualified.
Plan administration servicesRead more about state-approved qualifying retirement plans.
Illinois mandate FAQs
Is Illinois Secure Choice the same as My Illinois Savings?
Yes. The program was rebranded from Illinois Secure Choice to My Illinois Savings; the underlying mandate under the Illinois Secure Choice Savings Program Act is unchanged.
Which Illinois employers are covered?
Employers with five or more employees during every quarter of the prior calendar year, in business at least two years, that do not sponsor a qualified retirement plan. The threshold dropped from 25 to 5 employees in 2021.
What are the Illinois penalties for not complying?
Under 820 ILCS 80/85, penalties are $250 per eligible employee for the first calendar year of non-compliance and $500 per employee for each subsequent year u2014 and non-consecutive years still count toward the higher tier. The Illinois Department of Revenue has enforced penalties since February 2023.
All the deadlines have passed u2014 can we still register?
Yes, and you should immediately. All five registration waves closed by November 1, 2023, so any covered, unregistered employer is accruing penalty exposure until it registers or adopts a qualifying plan.
Does a 401(k) get us out of My Illinois Savings?
Yes u2014 sponsoring any qualified retirement plan (401(k), 403(b), SEP, SIMPLE) exempts you from the program. Many Illinois employers choose a Safe Harbor 401(k) to pair the exemption with simplified compliance testing.
Source and review information
- Official program source: myilsavings.com (opens in a new tab)
- Last reviewed July 2026 by the LRS compliance team. Primary-source verified
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This page is provided for general information only and is not legal or tax advice. Program details change; confirm requirements with the official state program or your advisors.