Many Illinois Retirement Savings Program residents feel their financial security is improving
Many participants in the Illinois Secure Choice Retirement Savings Program for Private Sector Workers expressed a positive opinion of the program in a survey conducted for The Pew Charitable Trusts.
The state-sponsored pension scheme, launched in 2018, automatically enrolls workers at companies with at least 25 employees that do not yet offer a scheme. Eligible participants can opt out of the Individual Retirement Account program, commonly referred to as a self-IRA, at any time. The survey provides insight into how the program works for savers.
The RAND Corp. conducted a series of surveys for Pew of adults eligible to participate in Illinois Secure Choice, reaching a representative sample of workers enrolled in the program as well as those who opted out. The survey was conducted in three waves at approximately six-month intervals from March 2020 to April 2021. This article examines the results of 1,232 respondents who completed the last wave conducted from March to April 2021.
Auto-IRA programs can help individuals access workplace retirement savings opportunities and improve their long-term financial security. Initial reactions in Illinois have been positive. Nearly 4 in 10 people enrolled in the program say Illinois Secure Choice has made them feel more secure financially. Although around half said the program had so far had no impact on their sense of financial security, savers who reported an impact were more likely to say it was positive than negative.
The workers seem satisfied with the program. When asked to provide an overall rating of their experience, almost everyone (about 96%) said they were satisfied or neutral. Just over 6 out of 10 respondents said they were very satisfied or somewhat satisfied. A Pew study examining employer attitudes toward a similar program in Oregon, known as OregonSaves, found that 73% of participating companies were satisfied or had a neutral experience. Combined, these results suggest that satisfaction is strong for companies and employees participating in self-IRA programs.
Positive experiences are also reflected in participants’ ratings of confidence in the program. Illinois Secure Choice communicates directly with eligible participants about important program details such as account setup, unenrollment process, investments, and account management. About two-thirds of participants said they strongly or somewhat agreed with the statement: “I trust information from Illinois Secure Choice.” Only 5% of savers disagree.
The results show that savers participating in the Illinois Secure Choice program are more likely than not to say that if the program has had an impact on their financial security, it has been positive; that they are satisfied with their experience; and that they trust the program. State-sponsored self-IRA programs provide workers with meaningful access to a way to save for retirement through regular withdrawals from their paychecks.
Illinois, Oregon and California all enroll savers in such programs. Five additional states — Colorado, Connecticut, Maryland, New Jersey and Virginia — have allowed self-IRAs and will be enrolling savers in coming years. It is important to understand the experience of participants as these programs continue to expand and more states adopt theirs.
John Scott is the Director and Mark Hines is a Senior Partner of The Pew Charitable Trusts Retirement Savings Project.