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The New York Secure Choice Savings Program (Secure Choice) is a state-designed retirement savings option for private-sector employees in New York. It’s structured as an automatic-enrollment Roth IRA via payroll deduction for employees whose employer does not already offer a qualified retirement savings plan.
Key features include:
- Contributions are made after-tax (Roth) via payroll deduction.
- Default contribution rate is 3% of gross pay, but employees may change their contribution or opt out.
- The account is portable: the employee keeps the IRA even if they change jobs.
- Employer has no fiduciary responsibility for the investment outcomes, and no requirement to make matching or employer contributions.
- The program is overseen by the New York Secure Choice Savings Program Board (the Board) under Article 43 of the New York General Business Law.
The purpose of Secure Choice is to close the retirement-savings gap among New York’s private-sector workers who lack access to employer-sponsored retirement plans.
Who Must Participate
The mandate for employer participation (or alternative provision of a qualified plan) kicks in under the following conditions:
An employer is covered if all of the following are true:
- The employer has 10 or more employees in New York who were employed throughout the prior calendar year.
- The employer has been in business for at least 2 years.
- The employer does not currently offer a “qualified retirement plan” (such as a 401(k), 403(b), SIMPLE IRA, SEP, etc.) to its employees.
If an employer meets those criteria, the employer must either:
- enroll in Secure Choice when it launches, or
- offer a qualified retirement plan instead of Secure Choice (thus becoming exempt).
Employees eligible for participation are:
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Individuals age 18 or older who are employed by the covered employer in New York and whose wages are subject to New York income tax, whether full-time or part-time.
Employer Obligations
While the plan is designed to minimize employer burden, there are specific obligations for covered employers when the program goes “live”. Key obligations include:
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Registration / Account Setup
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When you receive notification from the Program (or once enrollment opens), the employer must register with the Program, create an employer account, and upload or provide required business and employee information.
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Employee data typically required: full name, Social Security/ITIN, date of birth, address, email/phone if available.
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Automatic Enrollment of Employees
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For eligible employees (age 18+, working in NY, etc), the employer must enroll them automatically in the Program through payroll deduction, unless the employee opts out.
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The default contribution rate is 3% of gross pay. Employees may choose a different percentage or opt out entirely.
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Payroll Deduction & Remittance
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Employer must set up payroll to withhold the employee’s contributions each pay period based on the deduction election (or default).
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Employer must remit those employee contributions in a timely fashion to the Program’s designated administrator.
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Informing Employees & Record-keeping
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Employer must provide employees with the Program’s informational materials (often provided by the state).
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Employer must maintain records to show participation, opt-outs, contribution remittance, etc.
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Exemption Certification (if applicable)
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If the employer already offers a qualified retirement plan, they may certify that fact to avoid participation in Secure Choice. The employer must follow the state’s procedure for granting that exemption.
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Timing / Deadline
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Although the exact “go-live” date for the Program has not been finalized, the law provides that once the Program opens for enrollment, covered employers will have up to nine months to establish payroll deposit arrangements.
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No Employer Contributions & No Fiduciary Role
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Employers are not required (and indeed prohibited under this Program) to match employee contributions or make employer contributions.
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Employers are not considered fiduciaries for the Program (the investment selection, IRA administration, etc, are handled by the Program), so the employer’s risk is limited to compliance with its administrative role.
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Why This Matters & Next Steps
For many small to midsize New York employers who currently do not offer a retirement plan, Secure Choice presents both an obligation and an opportunity:
- Obligation: If you qualify (10+ employees, 2+ years, no current plan), you will need to decide whether to enroll in Secure Choice or set up your own qualified retirement plan (e.g., 401(k), SIMPLE IRA) to satisfy the mandate.
- Opportunity: Offering a retirement savings option (via Secure Choice or your own plan) can help with employee retention, recruitment, and employer brand. Socially and financially, this is increasingly relevant. Some employers may prefer to set up a private plan (with higher contribution limits, ability to match, etc) rather than adopt the “one-size-fits-all” state model.
Action steps for employers
- Determine if you meet the “covered employer” criteria.
- If you already offer a qualified retirement plan, gather documentation to certify an exemption.
- If you don’t offer a plan, decide whether you will enroll in Secure Choice when it launches or set up your own retirement plan (401(k), SEP, etc).
- Audit your payroll system: ensure you can handle Roth after-tax deductions, new contribution rates, employee opt-out, and remittance to the external provider.
- Stay alert for the official “go-live” date from the Program Board and communicate with your employees about upcoming changes.
- Once open, register, upload employee data, set up payroll deduction, distribute materials, and begin remitting contributions.
Summary
The New York Secure Choice Savings Program is a mandatory (for covered employers) state-facilitated retirement savings vehicle designed to help employees save for retirement through automatic payroll deductions into a Roth IRA. Employers with 10 or more employees, in business for at least two years, and lacking a qualified retirement plan must either participate in Secure Choice or offer a separate qualified plan. While the employer role is limited (no contributions required, no fiduciary responsibility), administrative tasks such as registration, payroll setup, employee enrollment/opt-out management, and remittance are mandatory. Employers should begin preparing now, given that the program’s launch is forthcoming.
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