PEORIA (25News Now) – For those who work in small businesses, retirement plans weren’t always a guarantee until recently.

A state law passed in 2018 required all private employers to offer retirement benefits to their workers. They essentially have limited options. Business owners can enroll in their own retirement plans, use the state-sponsored Illinois Secure Choice, or face fines of $250 per employee per year for the first offense, and $500 per employee per year for subsequent offenses.

Individual employees can also sign up for Illinois Secure Choice.

The state law has had a slow rollout from largest to smallest employers. By November 2023, businesses with even a handful of employees were required to offer benefits.

Financial adviser Derek Stephens with Northwestern Mutual said employers can’t afford not to offer a plan, but finding the right one is a matter of laying out the options and seeing what works for the business’ budget.

“If the employer decides to design their plan they have more choice, more parts in the design that really can help them with their needs… it’s more customized, right?” Stephens said.

Financial adviser with Northwestern Mutual Derek Stephens(WEEK)

On the other hand, Illinois’ Secure Choice doesn’t charge employers fees or require them to match an employee’s contribution. That could make it more cost-effective for businesses that can’t handle those costs. Other plans could offer federal tax credits, making it a matter of what employers can afford.

Whatever the cost, offering those benefits could be a necessary part of the changing job market as employees look for work that will give them more in return.

“If you want to keep up with the larger corporations that are out there, these are the type of things you need to put in place,” Stephens said, “and putting a retirement plan in place doesn’t need to be overcomplicated.”

Jenny McCoy, co-owner of the local business Corpo Bello Salon, knows the value of giving extra benefits to employees.

Corpo Bello has been in business for 17 years, employing around 50 people at two locations in Peoria and Washington. They’ve been offering a match IRA since long before state law required it.

McCoy believed it was a necessary step to elevate cosmetology work as a lifelong career.

Co-owner of Corpo Bello Salon Jenny McCoy(WEEK)

“We have struggled in our industry to make us a viable business and lucrative for our service providers. In our industry especially it’s not really something that’s offered,” she said.

McCoy admits it was costly to start up the retirement plan, and it has additional costs for matches and fees. However, she sees it as a necessary investment and something that shows commitment to the workers and their careers. The salon employs people of a variety of ages, and she’s happy to see younger workers start saving early.

“Our team members get monthly statements and they’re like ‘Oh my gosh you should see how my plan is growing!’” she said.

McCoy and Stephens advise doing plenty of research before making a decision and contacting a financial adviser to see what will work with a business’s finances.

Secure Choice is a Roth IRA plan managed by a board appointed by the Governor. It is technically managed by the state’s Treasurer’s office.

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