SPRINGFIELD — State Senator Robert Martwick passed a measure that would automatically enroll new Chicago police officers, firefighters and municipal employees into deferred compensation retirement savings.
“The best time you can start saving for retirement is yesterday, but the second best time is today,” said Martwick (D-Chicago). “By ensuring new employees are automatically enrolled in a deferred compensation plan, we can take the guesswork out of figuring out when, or even how, to start saving for that future.”
Under the legislation, any person who is hired as a Chicago city employee – whether fire, police or municipal – after Jan. 1, 2027 would be automatically enrolled into an eligible deferred compensation plan that the municipality has established for its employees. These plans would be in addition to the employee’s pension in an effort to supplement the retirement funds of individuals with Tier 2 pensions.
The default contribution rate would be set at 3% of the employee’s salary with an automatic increase by 1% per year. Employees would have 30 days to opt out of automatic enrollment, as well as the opportunity to opt out of the automatic contribution increases.
“Having both a pension and a deferred compensation plan creates a more resilient retirement strategy,” Martwick said. “Together, they give workers more control and confidence in planning for their futures.”
Senate Bill 1454 passed the Senate Wednesday.
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