On October 21, 2021, New York Governor Kathy Hochul enacted bill S.5395-A/A.3213-A which amended the state’s existing Secure Choice Saving Program from being a voluntary program to now being a mandatory program for employers with 10 or more employees.
This update means a great deal for New Yorkers as more than 3.5 million working New Yorkers have no access to a retirement savings plan at work.
Private companies, including private not-for-profit organizations, who already offer employees retirement plans need not worry, but employers that had 10 or more employees in the previous year, have been in existence for at least two years, and do not currently offer a qualified retirement plan are affected.
While the program was originally voluntary, employers who meet all three of the above requirements must automatically enroll employees who don’t choose to manually opt out.
The program will be managed by the New York State Secure Choice Savings Board and the Department of Taxation and Finance will be responsible for developing and implementing the program, although the timeline is still up in the air.
Once established, the responsibilities for employers include:
- Creating a payroll deposit retirement savings system
- Automatically enrolling employees who do not opt-out of the program
- Withholding and remitting employee contributions to the program
- Disseminating the state’s employee informational materials.
In the past, New York City enacted a similar program (2021 Chs. 51 and 52) for employees with regular duties within the city limits. The New York City legislation includes a provision under which the city will discontinue its program if the state establishes a retirement savings program that requires “a substantial portion of employers who would otherwise be covered” by the city program to offer to their employees a savings program through payroll deduction or another method of contribution. Now that the State of New York has enacted a similar mandatory program, it’s likely the City of New York won’t implement its program.
Those impacted employers who do not offer a traditional retirement plan need to start planning for implementation in 2022.
For more information or immediate guidance on retirement savings opportunities, contact us at email@example.com.