The Illinois Senate on Dec. 3 approved by a 30-25 margin a version of the bill passed earlier in the week by the Illinois House. Quinn – who lost his reelection bid in November – is expected to sign the bill into law.The legislation includes a requirement that private employers with 25 or more employees either offer the state-run auto-IRA arrangement or be subject to a fine of $250 per employee per year. That requirement would only apply to employers that choose not to sponsor any other type of private retirement plan for their eligible employees.
The Illinois Senate initially passed the legislation in April, but the bill languished in the Illinois House for months due to opposition. However, following an extensive education and lobbying campaign by State Sen. Daniel Biss (D-Evanston), the lead sponsor of the bill, the Illinois House took up and passed the bill during its current special legislative session on Dec. 2, by a comfortable margin of 67-45.Even if, as expected, Quinn signs the legislation, other potential roadblocks remain that may delay or block implementation of the state-run program. For instance, the bill contains language specifying that the program cannot be implemented if the federal government determines that either:
- the IRA arrangements offered under the program are not tax qualified; or
- the program is an ERISA employee benefit plan (a typical consideration in a number of these state proposals).