New York Secure Choice Launches

New York Governor Kathy Hochul announced on Wednesday the launch of the New York State Secure Choice Savings Program, a state-sponsored savings vehicle for private-sector employees who lack access to a retirement plan at work.

Employers are now required to register and facilitate their employees’ participation in New York Secure Choice if they:

• Had at least 10 employees in the previous calendar year;
• Have been in business for at least two years; and
• Do not offer a qualified retirement plan.

According to the announcement, New York Secure Choice will notify employers required to facilitate the program and provide them with registration details. Eligible employers can also enroll now by visiting the program website.

A fact sheet, published by the state government prior to the announcement, stated that enrollment in the program was expected to become mandatory for qualifying companies this fall. The program was created in the 2018-19 state budget as a voluntary mechanism to deposit payroll deductions into Roth individual retirement accounts, available to employees of organizations that chose to adopt the offering.

In 2021, Hochul signed a bill amending the program and making it mandatory for certain covered employers. Enrollment remained voluntary until now, however, to allow the state to establish the governing board and complete foundational tasks for which the board is responsible. 

“With the launch of the New York State Secure Choice Savings Program, we are expanding access to retirement savings and empowering New Yorkers to invest in their future,” Hochul said in a statement. “The program provides another tool for employees to build long-term financial security and plan for a dignified retirement.”

Employers will have nine months to register, upload employee data and start deductions. Employees will be automatically enrolled at a saving rate of 3% of gross pay but can opt out at any time, according to a fact sheet for employers.

With the addition of New York, the financial technology company now powers 85% of government-run private sector retirement programs across payroll-deducted IRAs and for 529 Education Savings and ABLE Disability Savings accounts, according to an announcement from Vestwell on Wednesday. 

New York is the 14th state to implement a state-facilitated retirement savings program. Assets under management among the 13 state programs active as of September 30 exceeded $2.56 billion, according to the Georgetown Center for Retirement Initiatives. The 11 live auto-IRA programs represent more than $2.5 billion of the assets administered.

State program assets grew $500 million from May to September—the fastest pace for adding $500 million to date.