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State starts retirement savings program

ILLINOIS (WCIA) -- In an era where retirement savings could be needed more than ever, the state is taking steps to ensure more people have one.

Soon, some workers will automatically see a portion of their checks put into retirement funds. It's part of a new, groundbreaking program just kicking off in the state.

Illinois is one of the first states to implement the program which has been years in the making. In fact, Governor Pat Quinn signed it into law. This month is when the first phase goes into effect.

Just a few companies are signed up, but by 2019, more than one million people in the state will have brand new opportunities to save up.

"Hello there. How are you? Is this your first time in?"

It's the warm welcome which keeps customers coming back. Janet Barkmeier, a retired teacher, just reopened her gift store three months ago. Her wake-up call? A breast cancer diagnosis.

"I'm doing fine. My doctors say you really need to find something to bring you joy other than getting through the treatment and, I thought, ah, the most fin I ever had was my gift shop."

Monday through Saturday, she's here, bringing joy to her community.

"I love it. In fact, one of my employees is one of my former students."

She calls herself maternal and treats employees with the same care. Now, she could have a chance to take it even further, by helping them save for retirement.

"As an employer, I want to do everything I can, I mean, I want a healthy environment. I want an emotional environment that's positive, but to have it also where it is, I know, hey this is helping take care of them later on."

If her business grows to 25 employees, she'll be eligible for the Illinois Secure Choice Program. Starting now, companies can sign up for free and a portion of employees' checks will be put into an investment savings account.

"I don't see a downside."

But, some do: The U.S. Chamber of Commerce calls it a poor substitute that will hurt small business. The program will be run by the state treasurer who says it will keep people off government assistance and save taxpayers' money.

Barkmeier, a retiree herself, agrees.

"I think it's a wonderful idea. So often, especially when we're younger, we're living more hand-to-mouth. We aren't thinking about later on, but you know, you save that little bit of money, you put it away and it's a nice nest egg."

It will only apply to businesses which don't already offer pensions or 401-K's to full-time employees. By the end of 2019, this will be a mandate across the state.

Bloomington, Peoria and Chicago are already among the areas participating. 5% of someone's pay will be deducted into a chosen investment account. They will not go into the general revenue fund.

Illinois and New York are among the first states mandating retirement funds. Seven others, including California, Connecticut and New Jersey, are moving forward with plans of their own. 

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