SPRINGFIELD – A new law sponsored by State Senator Robert Martwick (D-Chicago) gives public workers a better way to save for retirement.
“I’m happy the governor signed this plan to make better retirement savings available to many people in Illinois,” Martwick said. “Encouraging public workers to invest in their retirement early on will allow for greater savings later in life and a more financially stable future.”
Signed by the governor on Friday, Senate Bill 1675 ensures automatic enrollment into a deferred compensation plan for employees under the General Assembly, State Employee, and Judges Retirement Systems. Deferred compensation is essentially when an employer sets aside a portion of the employee’s pay for later, which brings tax benefits.
The law also allows the Illinois State Board of Investment to increase the default percentage amount of compensation that employees put into their accounts by no more than 1% a year. Employees will be able to elect to not receive automatic annual increases.
“This law will help increase retirement readiness for public sector workers,” Martwick said. “Helping them will ease the burden on future state budgets and ensure economic growth by providing them with the funds needed in retirement.”
The law becomes effective immediately.