New Illinois Small Business Retirement Plan Signed into Law

small business retirement plan, Illinois small business lawyerTraditionally, the benefits employees receive beyond certain minimum wage requirements have been a matter determined through negotiations between businesses and their employees. However, a new Illinois law will change that for many small businesses. This new employment law will change the face of retirement benefits.

New Law Will Create Retirement Plan Requirements, Even for Some Small Businesses

This new law, which the Chicago Tribune reported that Governor Quinn signed before leaving office, will require many businesses to offer retirement plans. Under this new law, any business that has been operating for two years or longer, and that employs at least 25 people, will have to offer its employees some sort of individual retirement savings option by June 1, 2017. While brand new businesses and the smallest of businesses will be exempt from the requirement, this will still force many businesses that never considered offering this level of benefits to do so.

Several Plan Options

The good news for business owners is that they will have a reasonable amount of flexibility when it comes to deciding which plan is best for them and their employees. While traditional pension plans or 401k plans are certainly one option, they are not the only options. Businesses can also work with private entities to create a plan, or they can chose to participate in the new Illinois Secure Choice Savings Program. This program, which is created by the new law, will come with a default 3 percent payroll deduction for employees. Using it may save business owners some of the costs of shopping for a private program. However, since each business is different and has different needs, it may not work for everyone.

No Matching Required

The other good news for small business owners is that they will not be required to match contributions made by their employees, although they are certainly free to do so if they wish. While there may be initial start-up costs of picking a plan and the cost of administering it over the years, those would be the only out-of-pocket costs for business owners. The availability of such plans may make Illinois businesses more appealing to prospective job candidates from out of state and in areas where Illinois borders other states that do not provide such benefits. Additionally, providing this sort of relatively low-cost benefit could decrease employee turnover and ultimately drive down business costs in the long run.

Contact Gierach Law Firm

If you are a small business owner and you are concerned about what this new law may mean for you, or if you have any other business law issues you would like to discuss, please contact the Illinois small business lawyers at Gierach Law Firm. Call us today at 630-756-1160. We can schedule an appointment to discuss your situation and how we can be of assistance.