Client Alert: New York’s Mandatory Retirement Savings Program: What Employers Need to Know Before March 16, 2026
Date: March 10, 2026
Who Is Covered/Who Must Participate
The New York State program applies to private-sector employers—whether for-profit or nonprofit—that are located in New York State, have been in business for at least two years, have employed ten or more employees in New York State in the past 12 months, and do not already offer a qualified retirement plan to their employees such as a 401(k), 403(b), or similar arrangement. Employers cannot drop an existing qualified plan to participate in Secure Choice instead. Covered employers must automatically enroll eligible employees in the program, although employees may opt out from participation or change their contribution rate or investment option, at any time. Eligible employees are those age 18 or older who receive taxable wages from a covered employer.
Compliance Deadlines
The program uses a phased rollout based on employer size:
Employer Size Compliance Deadline
30 or more employees March 16, 2026
15–29 employees May 15, 2026
11–14 employees July 15, 2026
Employer Obligations
Covered employers should take the following steps: automatically enroll eligible employees in the program, facilitate payroll deductions at the default contribution rate of 3% of gross wages (or as adjusted by the employee, subject to federal IRA limits), remit contributions to the program, and provide required informational materials and disclosures to employees upon commencement of the program and upon hire.
Employers may not contribute to employee accounts. However, employers are not fiduciaries under the program and bear no liability for employees' participation choices, investment decisions, or outcomes. The program is overseen by the New York Secure Choice Savings Program Board which has the fiduciary responsibility to act in the best interests of participants.
Penalties for Non-Compliance
The program's enabling legislation authorizes the Secure Choice Savings Program Board to determine enforcement of penalties but the website for the program does not currently address penalties for non-compliance. Employers should monitor guidance from the Board and the program's website at securechoice.ny.gov for specific information regarding enforcement procedures and penalties as the compliance deadlines approach.
Key Program Features
The Secure Choice program establishes Roth IRAs for participating employees, meaning contributions are made on an after-tax basis. Depending on the timing of the withdrawals, qualified distributions may be tax-free. The program offers a range of investment options, including life cycle funds and conservative principal protection funds, with a default option for employees who make no selection. Fees and Portability: Annual fees are auto-deducted from participant accounts. Accounts are portable, allowing employees to keep their savings if they change jobs.
Action Items for Employers
Employers should take the following steps now: (1) determine whether their organization is subject to Secure Choice by confirming employee count and whether they offer a qualifying retirement plan; (2) if covered, prepare payroll systems to handle automatic deductions and remittances; (3) develop a process to distribute required informational materials and disclosures to employees; (4) consider whether establishing their own employer-sponsored retirement plan—which would exempt the employer from Secure Choice—better serves their organization's goals and workforce needs; and (5) monitor securechoice.ny.gov for additional guidance, including detailed penalty provisions, as implementation approaches.
If you have questions or would like assistance with legal compliance, please contact your Whiteford attorney.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.