Gov. Kathy Hochul (D) has signed into law legislation that would convert New York State’s voluntary participation state-run IRA program to mandatory for employers that do not offer a retirement plan and employ 10 or more employees.
The legislation had been passed by the State Senate back in June, and by the New York General Assembly in May. The measure (S.5395A/A.3213A)—which takes effect immediately—requires that employees be automatically enrolled in the state’s Secure Choice Savings Program to get more people in the private sector saving for retirement.
More than half of New York’s private-sector workforce doesn’t have access to employer-offered savings options, according to AARP New York.
The law—though mandatory for qualifying employers—retains the option for workers to opt out. Employers which have had at least 10 in-state employees in the past year, have been in operation for at least two years, and do not offer a workplace retirement plan will be required to create a payroll deposit arrangement within nine months after the program opens.
Established in 2015 by the New York State Secure Choice Savings Program Act, the Secure Choice Savings plan is overseen by the New York State Secure Choice Savings Board, composed of nine appointed members. The Department of Taxation and Finance will oversee the development and implementation of the program as the board sees fit, according to a press release from the governor’s office.
A national mandate with similar provisions (however, including grandfathering of such existing state-run IRA programs) is included in the retirement subtitle of the Build Back Better Act, legislation supported by the American Retirement Association as a way to help close the coverage gap and boost the existing retirement savings system, though it would apply to businesses with five or more workers.
