Are New York Employers Ready for Retirement Savings Programs?

Published by the New York Law Journal

 As of January 2026, most New York employers are required to offer employees access to a retirement savings program. Employers may satisfy this requirement either by establishing their own qualified retirement plan or by participating in the New York Secure Choice Savings Program (“Secure Choice”), a state-administered Roth IRA retirement savings program. While Secure Choice enables employers to comply with the law, it also presents an important strategic decision: whether to utilize the state-sponsored program or adopt a private retirement plan that may better support recruiting, retention, and employee retirement savings goals.

What is Secure Choice?

Secure Choice is a state-facilitated retirement savings program for employees who do not have access to an employer-sponsored retirement plan.

Under the program:

• Employees contribute through automatic payroll deductions into Roth IRA accounts;
• Employees are automatically enrolled unless they opt out;
• Employers facilitate payroll deductions but do not contribute funds; and
• Employers do not select investments or manage accounts.

Which Employers Must Participate?

Generally, employers must participate if they:

• Have been in business for at least two years;
• Had at least 10 employees in New York during the prior calendar year; and
• Have not offered a qualified retirement plan during the preceding two years.

Employers that sponsor qualifying retirement plans, such as 401(k)s, SIMPLE IRAs, SEP IRAs, or 403(b) plans, are generally exempt. Exempt employers must certify their exemption through the New York State Secure Choice Savings Program portal to avoid penalties.

Registration Deadlines

The time for covered employers to register is based on workforce size:

• 30 or more employees in New York: March 18, 2026
• 15–29 employees in New York: May 15, 2026
• 10–14 employees in New York: July 15, 2026

Employer Responsibilities

Participating employers generally must:

• Register with the state;
• Upload certain employee information to the state;
• Facilitate payroll deductions;
• Process employee opt-outs and contribution changes;
• Remit contribution information through payroll;
• Maintain required records; and
• Distribute required notices.

Importantly, employers do not:

• Make employer contributions;
• Select investments;
• Manage participant accounts;
• Provide investment advice; or
• Act as fiduciaries.

Payroll Administration Considerations

Because Secure Choice operates through payroll deductions, employers should confirm their payroll provider can support:

• Roth IRA payroll deductions;
• Automatic enrollment;
• Opt-outs and contribution changes;
• Timely contribution remittance; and
• Required reporting and recordkeeping.

Before implementation, employers should discuss administration requirements and any additional fees with their payroll provider, and confirm their payroll provider supports integration with Secure Choice.

Compliance Risks and Penalties

Although Secure Choice is designed to minimize employer involvement, covered employers must still satisfy certain administrative obligations. Failure to comply with program requirements exposes employers to enforcement actions, penalties, and administrative complications.

Potential compliance concerns include:

• Failure to register with the program by the applicable deadline (if you already missed the deadline, enroll immediately);
• Failure to facilitate employee payroll deductions;
• Failure to timely remit contribution information or payroll deductions;
• Failure to process employee opt-outs or contribution elections;
• Failure to maintain required records; and
• Failure to provide required employee notices or disclosures.

While exact enforcement dates and final penalty rules remain subject to ongoing review, New York is expected to follow an escalating per-employee penalty structure.

Employee Contributions and Roth IRA Considerations

Employees are generally enrolled at a default contribution rate of 3% of compensation unless they elect otherwise. Because Secure Choice utilizes Roth IRA accounts, employee contributions are subject to annual IRA contribution limits. Current limits are:

• Under age 50: $7,500
• Age 50 and older: $8,600

These limits are significantly lower than those available under many employer-sponsored retirement plans. In addition, high income earners cannot contribute to Roth IRAs based on the following schedule for 2026:

• Single filers generally begin phasing out at $153,000 of income and become ineligible at $168,000.
• Married couples filing jointly generally begin phasing out at $242,000 and become ineligible at $252,000.

As a result, Secure Choice is less attractive to highly-compensated employees seeking to maximize retirement savings opportunities.

Some individuals who exceed Roth IRA income limits utilize a “Backdoor Roth” strategy involving a traditional IRA contribution followed by a Roth conversion. Because the tax consequences can be complex, employees should consult their personal tax advisors. Secure Choice does not facilitate these transactions.

Growing Trend of State Auto-IRA Programs

New York is one of a growing number of states that have adopted automatic IRA (“auto-IRA”) programs designed to expand retirement savings access for employees who do not have access to employer-sponsored retirement plans. A sampling of states with active or implemented programs include:

• California (CalSavers)
• Connecticut (MyCTSavings)
• Illinois Secure Choice
• MarylandSaves
• New Jersey Secure Choice
• OregonSaves
• Colorado Secure Savings
• Minnesota Secure Choice

As of early 2026, 17 total states have adopted auto-IRA programs and 15 of them are actively enrolling participants. It is likely that these programs will continue to expand across the country.

For multi-state employers, be aware that compliance obligations may vary by state. Seek competent counsel to ensure your program meets all relevant state mandates.

Secure Choice vs. Private Retirement Plans

For many employers, the key question is not whether they must comply, but which program is best. If this is your question, consider the following comparison:

Factors to Consider

When deciding between Secure Choice and a private retirement plan, employers should evaluate:

• Workforce demographics (higher-compensated employees may be less interested in the Secure Choice option);
• Administrative capacity;
• Payroll service capabilities;
• Cost considerations; and
• Recruiting and retention goals.

Employer Action Checklist

• Determine whether you are covered by Secure Choice;
• Confirm whether an existing retirement plan provides an exemption;
• Decide between Secure Choice and a private retirement plan;
• Coordinate with payroll providers;
• Designate an internal administrator;
• Register with the state; and
• Establish procedures for payroll deductions and employee communications.

Conclusion

The New York Secure Choice Savings Program provides employers with a relatively simple and very low-cost method of complying with New York’s retirement savings requirements. For some employers, participation in the program may be the most practical solution. For others, particularly those focused on recruitment, retention, executive compensation, or maximizing retirement savings opportunities, a private retirement plan may provide greater long-term value.

As the registration deadlines are passing, employers should evaluate whether they are covered by the law, confirm whether they qualify for an exemption, assess their payroll capabilities, and determine whether participation in Secure Choice or implementation of a private retirement plan best aligns with their workforce and business objectives.

Brody and Associates regularly advises employers on compliance with federal, state, and local employment laws, including employee benefits and retirement plan issues. If we can be of assistance, please contact us at info@brodyandassociates.com or (203) 454-0560.