Live mandate
Does my Illinois business have to offer a retirement plan?
Short answer
Yes, if you had 5 or more employees in every quarter of last year, have been in business at least 2 years and don’t offer a retirement plan such as a 401(k). You either register for My Illinois Savings, formerly Illinois Secure Choice, or certify that you already offer a plan. Penalties are $250 per employee for the first year and $500 per employee for each year after.
Who must comply
You must register if your business operating in Illinois meets all three tests: 5 or more employees in every quarter of the previous calendar year, at least 2 years in business, and no qualified employer-sponsored plan (such as a 401(k), 403(b), SEP IRA or SIMPLE IRA) or qualified union plan for member employees.
Deadlines
Illinois registered employers in waves from 2018 through November 1, 2023, and now runs one wave a year for newly eligible employers. The 2027 date isn’t published yet (2026: November 1). Businesses past their deadline should register or certify an exemption now.
Penalties
Illinois charges $250 per employee for the first calendar year you don’t comply without a good reason, and $500 per employee for each year after that, even if the years aren’t back to back. The Department of Revenue counts your employees from quarterly wage reports and sends the bill.
How to get exempt
If you sponsor or contribute to a qualified plan, including a 401(k), 403(b), SEP IRA or SIMPLE IRA, you are exempt, but My Illinois Savings says you still need to certify the exemption. Use the Access Code from your notice and your FEIN on the My Illinois Savings exemption page. Contributing to a qualified plan for union member employees also makes an employer exempt.
My Illinois Savings or a 401(k)?
My Illinois Savings accounts are Roth IRAs, so each saver is held to the IRA limit: $7,500 a year in 2026 and 2027, or $8,600 at 50 or older, across all their IRAs. Higher earners can be phased out of Roth contributions altogether, starting at $153,000 of income for single filers in 2026 and $158,000 in 2027. A 401(k) leaves far more room: employees can defer $24,500 in 2026 and $25,500 in 2027, plus catch-ups from age 50. My Illinois Savings doesn’t allow employer contributions, so you can’t add a match; a 401(k) can include one. My Illinois Savings costs employers nothing to run; savers pay the account and fund fees. New savers start at 5% of pay, rising 1% a year to 10% unless they change it.
Sources
My Illinois Savings (formerly Illinois Secure Choice): Program details (employers) (myilsavings.com) My Illinois Savings: Program details (savers) (myilsavings.com) Illinois General Assembly: 820 ILCS 80/85 Penalties (ilga.gov) Illinois Department of Revenue: Secure Choice Program Enforcement (tax.illinois.gov) Internal Revenue Service: 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 (irs.gov) Internal Revenue Service: COLA increases for dollar limitations on benefits and contributions (irs.gov) Internal Revenue Service: 401(k) plan overview (irs.gov) Georgetown University Center for Retirement Initiatives: States: 2026 state program status (as of November 6, 2026) (cri.georgetown.edu)
This page is general information, not legal or tax advice. Confirm current rules with the state program before acting.
