Late in 2021, New York State followed the trend of other States that are requiring employers to have an automatic enrollment retirement plan for employees. The New York State Secure Choice Savings Plan (Secure Choice) is expected to be mandatory later this year for New York State private employers – including non-profit employers – if the employer (1) employed at least 10 employees in NYS at all times during the previous calendar year, (2) has been in business at least two years, and (3) has not offered a retirement plan (e.g., 401(k) plan, profit sharing plan) in the preceding two years. See our article about the NY law change: https://acsi-ny.com/more-about-mandatory-retirement-plans-and-automatic-enrollment-new-yorks-mandatory-program/.
Many of you are likely to be exempt from Secure Choice, for example, because your business is smaller, or you have been offering a retirement plan to your employees. We have been watching for NYS guidance about the new Secure Choice requirements, including rules about individual and business waivers from participation.
The law change requires the Secure Choice Board to implement the guidance. The first meeting of the Secure Choice Board occurred late January 2022. One of the very notable items from that meeting is that one aspect of “choice” will be limited: it appears there will be an approved list of vendors (i.e., Secure Choice retirement plan providers) that can be used. See the last paragraph on page 4 and the first paragraph on page 5 of the Board meeting transcript: https://www.tax.ny.gov/pdf/scsp/transcript-01-26-22.pdf.
If you expect to be subject to the Secure Choice mandatory plan requirement, you may want to consider other options for a start-up plan that allows you the “choice” regarding service providers and investment vehicles.
We will continue to monitor the rules being established by the Secure Choice Board, and will provide future updates. In the interim, to learn more about retirement plan options, or proposed Federal laws regarding mandatory plans and automatic enrollment, contact mbrand@acsi-ny.com or check-out www.acsi-ny.com.
