We previously detailed the framework for New York’s mandatory retirement program, known as Secure Choice. Employers with 10 or more employees are now required to take action. To meet these requirements, non-exempt organizations (for example, a business with a 401k Plan is exempt) can either participate in the state’s Roth IRA-based program or establish an alternative retirement plan, which may offer higher contribution limits and tax advantages for the business. For a deeper look at Secure Choice and the program rules, you can refer to our October 2025 article here: https://acsi-ny.com/new-york-state-mandatory-retirement-plan-program-is-going-live-what-you-need-to-know/
Employers Must Take Action Now
All employers – including those that are exempt – must register on the New York Secure Choice website by certain specified dates to certify their status as exempt or covered. Failure to comply can result in fines starting at $250 per employee, eventually exceeding $1,000 for subsequent offenses. Employers are encouraged to review their obligations and plan offerings now to ensure compliance and avoid potentially steep penalties for non-compliance.
Less than two months remain until the first New York Secure Choice deadline. The first deadline is for employers with 30 or more employees, who by March 18, 2026 must either:
- Register for participation in the Secure Choice Program, or
- Certify Exemption
The deadlines for smaller employers are May 15, 2026 (15 to 29 employees) and July 15, 2026 (10 to 14 employees).
Employers Have Other Choices, Including Establishing a 401(k) Plan
Implementing a 401(k) plan is a high-impact business strategy that maximizes tax efficiency for the employer while serving as a powerful engine for employee recruitment and long-term retention.
For the 2026 tax year, updated IRS regulations and Federal incentives make offering a 401(k) even more advantageous for businesses:
- Expanded Tax Credits: Under the SECURE 2.0 Act, small businesses with 50 or fewer employees can qualify for a tax credit covering 100% of plan startup and administrative costs (up to $5,000 per year for three years). An additional credit of up to $1,000 per employee is available for employer contributions made during the first few years.
- Higher Contribution Limits: For 2026, the individual elective deferral limit has increased to $24,500, plus catch-up contributions if age 50 or older. For business owners, this allows for substantial personal retirement savings, with a total combined limit (employee + employer) of $72,000, plus any catch-up.
- New “Super” Catch-Up Provisions: Employees aged 60 to 63 can now contribute an enhanced catch-up amount of $11,250, rather than the basic catch-up of $8,000, bringing their total possible individual deferral to $35,750 in 2026.
- Competitive Recruitment Edge: Offering a robust retirement plan is a critical differentiator. Over 85% of employees now expect a retirement plan as part of their benefits package, and those with a 401(k) are significantly more likely to remain with their current employer.
- State Compliance: Offering a private 401(k) helps many businesses fulfill state mandates, including NY Secure Choice, that require employers to provide a retirement savings option.
To learn more about alternative retirement solutions like 401(k) or 403(b) plans, rather than defaulting into NY Secure Choice, please visit www.acsi-ny.com or contact James Brand at jbrand@acsi-ny.com.
