New York’s Secure Choice Savings Program is the state’s new way of helping workers save for retirement when their employer doesn’t offer a plan.
Instead of requiring businesses to build their own 401k program, the state creates a Roth IRA for each employee and automatically enrolls them. Contributions will come straight out of employee paychecks.
It seems like the program is simple enough, but there are a few rules, deadlines, and payroll steps involved that you should understand before the state starts enforcing everything.
After sitting in limbo for years, New York’s Secure Choice Savings Program is officially moving forward. Employer registration is open and that means you have to decide whether you want to offer your own retirement plan or move forward with Secure Choice.
New York State is still in testing mode and full enrollment & compliance dates are expected to roll out in 2026. Because pieces of this rollout have shifted more than once, the smartest thing you can do right now is start planning.
Not only are you responsible to offer this or a private plan, you need a way for accurate payroll deductions, proper notifications, and clean reporting. These pieces matter just as much as the plan itself.
Whether you have to enroll or certify an exemption depends on three criteria.
You are in the program if:
If you already offer a plan like a 401k or IRA, you’re not automatically off the hook. The state still wants you to officially confirm that exemption. That extra step is easy to miss and can cause issues later if it slips through the cracks.
Also important to note - New York City’s separate retirement law is no longer active. Everyone follows the State program now.
Not every worker is automatically included in the program. There are a few simple requirements that determine who must be enrolled. An employee is eligible if they:
There is no minimum number of hours, no full-time requirement, and no minimum tenure. If an employee receives taxable wages from a covered employer, they are eligible. This includes part-time staff, seasonal workers, and employees who may only work periodically throughout the year.
Employees who are rehired may need to be automatically re-enrolled unless their earlier opt-out decision is still in effect and properly documented. That is one of the reasons recordkeeping matters so much with this program.
New York has given employers three main registration deadlines:
At the same time, New York State has hinted that once enrollment opens in late 2025, employers will have roughly nine months to get everything in place, including payroll deductions.
Since these two messages don’t completely line up, it is safer to prepare for the earlier date. Waiting for clearer instructions later on could put you in a stressful position if timing changes again.
The program gives each eligible employee their own Roth IRA. Anyone eighteen or older who earns taxable wages in New York gets added to the program unless they opt out. You will have to automatically enroll these employees at a 3% contribution rate.
You must run the payroll deductions correctly, send the money in on time, update your employee information, and keep any opt-out forms on file.
You don’t manage investments, you don’t give financial advice, and you don’t pay administrative fees, but you do need accurate payroll processing. That is where most of the real work happens.
Unfortunately, yes. The penalties are serious. A first violation can cost $250 per affected employee. A second violation within two years jumps to $500 per employee. Anything after that it’s $1,000 per employee. If your records are missing or incomplete, you can be charged another $100 per employee on top of other penalties.
Because the law allows New York to calculate fines based on past periods of noncompliance, these penalties can be retroactive.
Employees must be auto-enrolled. This part is not optional. Each eligible employee has to get a thirty-day notice window, and if they don’t take action, contributions start automatically.
No and no. Employers cannot match contributions under this program. And because Secure Choice is not considered an employer-sponsored plan, there are no tax credits for participating.
This may entice business owners to look into a private retirement plan. Especially if you want to offer competitive benefits or receive tax credits.
Ask your Megapay advisor to help walk you through these comparisons!
Contributions come out after taxes for Roth IRA, so take home pay does decrease. Some employees will choose to opt out and others have the option to adjust their percentage.
Either way, you should expect questions like, "Why is my check smaller?" and "What are the benefits of a Roth IRA?"
Did you know that Roth IRAs offer tax-free growth and withdrawals? Here's a good resource to share with your team on the benefits.
The state will send its own materials, but employees will still tend to ask their employer first. You should explain that Secure Choice is a Roth IRA program created by New York, not by you. Employees start at 3% unless they change the amount or opt out entirely.
The account belongs to them and it stays with them even if they change jobs. After the first thirty days, their money moves from a conservative option into an age-based target retirement fund.
Employees also need to know about the program’s fees:
Let your team know that they are able to change their contribution amount or leave the program at any time.
The following states already have rolled out similar programs:
Some have already started enforcing penalties. New York’s following the same path and if you have staff in multiple states - you should stay up to date with their requirements too!
This is the stage where you should start identifying gaps in your process & systems.
Megapay can help you understand exactly what the state requires, configure payroll deductions correctly, clean up and organize employee data, and work through exemption certifications.
We can also help you compare Secure Choice with employer-sponsored retirement plan options so you can make the best long-term decision for your business. The rules are evolving and having a payroll partner who is watching the updates closely makes the entire process easier.
If you want support before the compliance deadlines start hitting, reach out to us!
We can help you get prepared and protect your business from avoidable penalties!