Earlier this month, New York State announced that the New York State Secure Choice Savings Plan (“Secure Choice”) is going “live” in waves over the next 9 months. Secure Choice is the mandatory retirement program for New York State private employers, including non-profit employers.
The Secure Choice mandate applies to an employer that:
- employed at least 10 employees in NYS at all times during the previous calendar year;
- has been in business at least two years; and
- has not offered a retirement plan (e.g., 401k Plan, SIMPLE IRA Plan) in the preceding two years.
All NYS employers are required to register on the Secure Choice website and, if exempt, certify the basis for the exemption. If the mandate doesn’t apply to your business, this is still very important as there will be future penalties for noncompliance with the mandate ($250 for each employee for a first offense, with future offenses eventually exceeding $1000 per employee).
Employers will receive a letter or email with an access code to register. Employers with 30 or more employees must register by March 18, 2026; employers with 15-29 employees must register by May 15, 2026; and employers with 10-14 employees must register by July 15, 2026.
The program specifics are summarized below:
- The employee accounts are Roth IRAs. They are subject to Roth IRA income limits and Roth IRA contribution limits.
- Employer contributions are not permitted.
- The program has automatic enrollment; if employees do not opt out within 30 days, they must be enrolled at 3% of pay.
- Vestwell is the recordkeeper for the program. Outside financial advisors cannot be used.
Employers subject to the mandate have certain responsibilities under the program including, among other things –
- Providing NYS with the name, Social Security Number, date of birth, mailing address, and contact information for their employees.
- Recording employees’ choices to opt-out, or opt-in at a different contribution rate than the default rate, submit contribution information to NYS, and process payroll deductions for the employees who choose to stay in the program.
- Maintaining employee records, including updating contribution rate changes when needed, adding new employees, and marking former employees as terminated.
- If the employer’s payroll provider does not have a direct link with the Secure Choice program, or there is no external payroll provider, the employer must manually upload payroll contributions each pay period to a state-run IRA.
To learn more about Secure Choice and consider alternatives such as a 401k Plan or 403b Plan, please check-out www.acsi-ny.com.
