Attention Employers: Required State-Based Retirement Programs Are Here

A number of states have enacted (or plan to enact) laws that require certain private employers to enroll employees in a state-based retirement savings program. Generally, these rules apply to employers that do not sponsor a qualified retirement plan like a “401(k) plan.” The state-based programs are typically automatic enrollment individual retirement arrangements for which the employer facilitates payroll deductions, but that are otherwise managed by the respective state. 

New York’s program is called the New York Secure Choice Savings Program (“Secure Choice”).

Employers who are required to facilitate the program must register by the following deadlines:

• 30 or more employees – March 18, 2026
• 15 to 29 employees – May 15, 2026
• 10 to 14 employee – July 15, 2026

If a company operates a business in New York State that (i) at all times during the previous calendar year had at least 10 employees in the state, (ii) has been in business for at least two years, and (iii) has not offered a qualified retirement plan (e.g., a 401(k), 403(b), or 457(b) plan*) in the preceding two years, the company is an employer that is required to register. For these purposes, an “employee” is an individual who is at least 18 years of age, and who earned wages working for an employer in New York State during the calendar year.**   

*The business may be exempt if it offers a company-sponsored retirement plan or has fewer than 10 employees. The company may certify its exemption on the New York Secure Choice website.

**The number of employees for purposes of determining employer eligibility in the program is based on employer-reported data submitted to New York State, including on Form NYS-45, Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return.

Eligible employers must:

• Provide Secure Choice basic identification and contact information while registering;
• Provide Secure Choice with certain contact and identifying information for each eligible employee; and
• Set up a payroll deposit retirement saving arrangement to allow employees to participate in the program on a post-tax basis, send contributions for employees who do not opt out of the program, and maintain accounts (e.g., updating contribution rates as needed and keeping employee lists up to date with respect to new hires and departing employees).

Under Secure Choice:

• Eligible employees are automatically enrolled at a 3% default rate (subject to annual federal limits for Roth IRAs) but may opt out or change the rate.
• Participating employers are not fiduciaries over the program and do not have responsibility for the administration or investment performance of the program.
• Employers are not required to establish an employee’s New York Secure Choice Roth IRA, answer questions about the program and its investment options (and shouldn’t!), or process distributions from employee investment accounts.
• There are no employer fees to facilitate the program; also, employers are neither required, nor permitted, to match employee contributions to the program.

More details can be found on the New York Secure Choice website.

Note that aspects of these state-based retirement programs can vary, such as in the size of the employers subject to the mandates, required deferral percentages, reporting requirements, penalties, and exemptions. If a company employs residents of multiple states, it will want to familiarize itself with the requirements and features of the applicable state-based programs. 

Your MoFo Benefits team is here to help you navigate as needed!