In a survey conducted for The Pew Charitable Trusts, many of the participants in the Illinois Secure Choice retirement plan for private sector employees gave positive feedback on the program.
The state-sponsored retirement plan, introduced in 2018, automatically enrolls workers in companies with at least 25 employees that don’t already offer a plan. Eligible Participants may opt out of the Individual Retirement Accounts program, commonly referred to as Auto-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 who were eligible to participate in Illinois Secure Choice and reached a representative sample of employees who had enrolled in the program and those who had opted out. The survey was conducted in three waves at approximately six-month intervals from March 2020 to April 2021. This article looks at the results of 1,232 respondents who completed the last wave, which ran from March to April 2021.
Auto-IRA programs can help individuals access occupational retirement plans and improve their long-term financial security. Initial reactions in Illinois were positive. Nearly 4 in 10 of the program’s participants say Illinois Secure Choice makes them feel financially more secure. Although about half said the program had not had an impact on their sense of financial security so far, savers who reported an impact were more likely to say it was positive than negative.
The workers seem happy with the program. When asked for an overall rating of their experience, almost all – around 96% – said they were satisfied or neutral. Just over 6 out of 10 said they were very or fairly 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. Taken together, these results suggest that satisfaction is high among companies and employees who participate in auto-IRA programs.
The positive experiences are also reflected in the confidence of the participants in the program. Illinois Secure Choice communicates directly with eligible participants about key program details such as account setup, opt-out process, investments, and account management. About two-thirds of participants indicated that they either strongly or somewhat agreed with this statement: “I trust information from Illinois Secure Choice.” Only 5% of savers disagreed.
The results show that savers who participate in the Illinois Secure Choice program are more likely to say that when the program has impacted their financial security, it has been positive; that they are satisfied with their experience; and that they trust the program. Government-sponsored auto-IRA programs provide workers with meaningful access to a way to save for retirement through regular withdrawals from their paychecks.
Illinois, Oregon and California now all enroll savers in such programs. Five other states — Colorado, Connecticut, Maryland, New Jersey, and Virginia — have allowed auto-IRAs and will enroll savers in the years to come. Understanding the participant experience is important as these programs continue to expand and other states enact their own.
John Scott is the director and Mark Hines is a key contributor to The Pew Charitable Trusts’ retirement savings project.