New York Mandatory Retirement Savings Program

Written by Leighann George
As you may recall, New York State’s Secure Choice Savings Program (the “Program”) was originally enacted as part of the 2018-2019 State Budget process as a voluntary program for employers who did not offer an employee retirement plan so that employees could contribute to their own portable, payroll-deduction Individual Retirement Accounts (IRAs). Participation in that Program will be mandatory for certain covered employers when it officially opens - likely next year. On October 21, 2021, Governor Kathy Hochul signed a bill effectively making the Program mandatory for private sector employers who: (a) have been in business for at least two years with a minimum of ten (10) employees during 2021; and (b) did not previously offer a qualified retirement plan in the last two years.  
Private sector employers include non-profits. A “qualified retirement plan” is described as “including, but not limited to, a plan qualified under sections 401(a), 401(k), 403(a), 403(b), 408(k), 408(p) or 457(b) of the Internal Revenue Code of 1986.” Employers who offer a qualified retirement program cannot terminate their existing programs for the purpose of participating in this Program. The Program is intended to be “self-sufficient,” because employees of covered employers are required to contribute at least three percent (3%) of their wages through an automatic payroll deduction. Employers are required to provide disclosure materials to employees and must enroll employees automatically (unless those employees have opted out via those disclosure materials) by providing payroll deduction retirement savings arrangements to deposit funds into the Program on their behalf.  
While the law is currently effective, the enforcement of the Program for covered employers will not occur until later in 2022 when the Program likely opens for enrollment and further regulations are released. Gov. Hochul stated that the Department of Taxation and Finance will oversee the development and implementation of the Program as the New York State Secure Choice Savings Board sees fit. Each covered employer must have a payroll deposit retirement savings arrangement set up for their employees within nine months of the Program’s eventual opening.  
What about that similar New York City retirement savings law? You may recall that New York City adopted a retirement savings law over the summer called the “Savings Access New York Retirement Program” for employees with regular duties in New York City. This City law has not been implemented for employers yet. Given the new State law, it is possible that the City’s program may be discontinued. 
At this point, employers should determine whether they are covered employers under the Program, and if so, how they wish to eventually comply with this law when the Program is opened and enforced on those employers, likely the middle of 2022. We will keep you informed when the Program opens, and further guidance is released. 
If you have questions, please contact the authors of this article, Leighann George or David Ofenloch, or another Clifton Budd & DeMaria LLP attorney.
About the Author
Leighann George
Leighann is a 2018 graduate of The George Washington University Law School.  She was Co-President of her law school’s Labor...
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