NY State Mandatory Secure Choice Savings Program PassedOctober 28, 2021
AB3213 amended the state’s existing Secure Choice Saving Plan from a voluntary to a mandatory program for employers with 10 or more employees who do not offer a traditional retirement plan.
At a Glance
- On October 21, 2021, New York Governor Kathy Hochul signed AB3213 which amended the state’s existing Secure Choice Saving Plan from a voluntary to a mandatory program for employers with 10 or more employees who do not offer a traditional retirement plan.
- The Department of Taxation and Finance is responsible for developing and implementing the program and the timeline is still TBD.
- Impacted employers will have up to 9 months to establish payroll deposits once the program opens for enrollment.
New York State Secure Choice Savings Program
New York’s Secure Choice program was voluntary for employers when it was enacted in 2018. The 2021 amendments makes participation mandatory for covered employers and requires them to automatically enroll employees who don’t opt out. Covered employers are those with 10 or more employees in the previous year, who have been in business for at least two years, and do not currently offer a qualified retirement plan.
The Department of Taxation and Finance has been tasked with the program’s development. A timeline has not yet been announced but once the program is open for enrollment, employers will have up to 9 months to establish payroll deposits.
New York City’s Mandatory Retirement Program
In May 2021, 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 other 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.
New York has become the latest state to implement a mandatory retirement savings program for private sector employees. Paylocity will be monitoring the rulemaking process and will provide updates as needed.
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