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BLOOMINGTON — Illinois Treasurer Mike Frerichs understands why many families haven't saved enough for retirement.

"The greatest force in the universe is inertia. Once someone starts saving, it is tough to stop. But if someone has never started, it's tough to get started," said Frerichs, a Champaign Democrat, of why half of American households haven't saved more than $5,000 for retirement. "It's imperative we help people do that which they know they need to do."

Frerichs is promoting Illinois Secure Choice, a program that lets workers at companies that don't have an automatic retirement plan like a 401(k) or pension take advantage of one administered by the state.

He spoke Wednesday during a visit to The Pantagraph office in downtown Bloomington.

Secure Choice started payroll deductions this month as part of a pilot that will expand in waves through the end of 2019 to include all Illinois businesses as long as they meet three criteria: 25 or more employees, established for at least two years, and without their own 401(k) or pension plans.

Frerichs acknowledged some may hesitate to participate in Secure Choice given the state's financial woes, including a looming pension debt crisis, but he noted Pennsylvania financial services firm Ascensus is managing the investments. The state acts as an administrator for a small fee which is enough to make the program break even for taxpayers, he said.

Frerichs encouraged eligible employers to contact the state about getting involved early; he noted employers already send payroll tax checks to the state, and have no other obligations and liabilities. The program expected to cover about half of Illinois businesses and 1.2 million residents.

Denise Geske, co-owner of Fox and Hounds Hair Studio and Day Spa in downtown Bloomington, said she was thrilled to get involved in the pilot. Of 44 employees there eligible for the program, 32 have not opted out; Frerichs said 90 percent participation is the state's goal.

"I wanted to hop on the pilot so I could have a direct line to somebody at the state to call for help. ... I thought it might be mandated (eventually), and we've wanted for years to offer retirement savings to our employees, but it hasn't made sense for us as a small business," said Geske. "It's been smooth. ... We feel safe because it is a Roth IRA. It's not a line item for the state."

Frerichs encouraged employees to contact their companies about getting involved and talk to their legislators about possibly expanding the program. He also suggested employees whose companies aren't eligible and don't offer an employer-sponsored plan begin saving on their own.

Frerichs is up for re-election this fall, opposed by Republican Jim Dodge and Libertarian Mike Leheney.

Contact Derek Beigh at (309) 820-3234. Follow him on Twitter: @pg_beigh

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Normal and McLean County Reporter

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