SPRINGFIELD – A new law spearheaded by State Senator Robert Martwick (D-Chicago) that will help public state workers better save for retirement was signed into law Friday.
“Employees across the state deserve to know their hard work will pay off into retirement,” Martwick said. “Encouraging people to invest in their futures earlier on will allow for more savings that leads to more financial stability.”
Senate Bill 2103 creates new deferred compensation plans for all participants of the State Universities Retirement System and Teachers’ Retirement System employees to allow for increased contributions to savings in retirement. Under the law, employees of SURS and TRS will automatically be enrolled into these plans, contributing 3% of their pre-tax income into their plan. Employees, however, do have the option to opt-out and may withdraw their funds at any time.
It also allows SURS and TRS to automatically increase the percentage of income contributed to their retirement savings.
“When employees begin saving early, they are better prepared for retirement. That helps them, and it helps our state by easing budget pressures. Well saved retirees also spend more, driving an important sector of our economy,” said Martwick.
Most provisions of the new law take immediate effect.