Attention local businesses: the Illinois Secure Choice Act requires all businesses of 5 or more to either offer an employer-sponsored retirement plan or enroll in Illinois Secure Choice (the state-run option). The deadline to do this depends on the size of your business.
The good news is you have options available to you. You can choose to enroll in Illinois Secure Choice. This option allows employees to defer their salary into a Roth IRA. There is no employer match , investment options are chosen by the state, and no financial advisor is involved. Another avenue you can choose is to offer a 401k/403b/etc. or SIMPLE IRA. Both of these allow salary deferral, and both allow employer-matching contributions. A 401k allows for pre- or after/Roth-contribution and for higher amounts to be invested per year, and provides more options for employer-matching or profit sharing, but is more work-intensive. A SIMPLE is less work-intensive, but only allows pre-tax contributions and mandates employer-matching. A third option is a SEP IRA. There is no salary deferral; the employer decides on a percentage of every employee's salary that the employer will contribute. These contributions are pre-tax only. A SEP allows all employees to work with a financial advisor to choose investments and for the highest amounts to be invested of the plans discussed.
Your head may be spinning with all of this information. To help, here are some starting questions to ask yourself. Would you like to offer salary deferral? Do you want to offer an employer-match and/or profit sharing? Who do you want to make investment option decisions and have access to working with a financial advisor? How much work do you want to put in on starting/keeping up the plan?
You do not need to think this through by yourself. Your financial advisor and accountant are important people to consult, as they can help you decide what kind of plan is best for you and your business. If you do not have a financial advisor and/or accountant, please visit our member directory at:
https://business.kankakeecountychamber.com/list/ql/finance-insurance-10
Original source can be found here.
Alerts Sign-up