More than half of New York's private-sector employees don't have access to a retirement plan through their employer, so New York State is doing something about it. In October 2025, New York launched the Secure Choice Savings Program, a state-sponsored retirement plan that requires most employers without an existing plan to automatically enroll their workers. New York is one of many states that have established programs to make it easier for businesses to provide retirement benefits and help employees save for their futures.
If your business has 10 or more employees, has been operating for at least two years, and doesn't already offer a qualified retirement benefit, you likely need to act.1 We've outlined what you need to know about the New York Secure Choice program, how it works, pros and cons of the state Roth IRA, and why many employers are choosing alternatives like Gusto 401(k) plans.
What is the New York Secure Choice Savings Program?
New York passed the law establishing the program in 2021, and after a multi-year development period, it officially launched in October 2025. Overseen by the New York Secure Choice Savings Program Board, it applies to New York businesses (for-profit or nonprofit) that have been in business for at least two years, have 10+ employees throughout the previous calendar year, and don't already offer a qualified employer-sponsored retirement plan.
Registration deadlines for the New York Secure Choice Savings Program are staggered by employer size1:
30 or more employees: March 18, 2026
15–29 employees: May 15, 2026
10–14 employees: July 15, 2026
Learn more at the New York Secure Choice website.
How does New York Secure Choice work?
New York Secure Choice is an automatic payroll deduction Roth IRA, meaning eligible employees are enrolled automatically unless they opt out. Contributions come out of each employee's paycheck on an after-tax basis, so when it comes time to take distributions after age 59½, those earnings aren't taxed.2
Who's eligible
To participate, employees must be:
18 or older
Employed in New York and receiving W-2 wages
Enrollment and contributions
Once enrolled, employees have 30 days to opt out. If they don't, they're automatically set to contribute 3% of their gross pay to a Roth IRA. They can adjust that amount at any time, as long as they stay within the annual IRS limits. For 2026, those limits are $7,500 for employees under 50 and $8,600 for those 50 and older.3
Investment options
New York Secure Choice does offer several investment options, so employees can decide how they invest their money. Employees can choose from a conservative principal protection fund, target retirement date funds, a growth fund, and a growth and income fund.
How much does New York Secure Choice cost?
For employers, New York Secure Choice is free. There are no setup fees and no required contributions.
Your employees, however, will pay a $28 annual per-account fee (billed at $7 per quarter), plus an asset-based fee ranging from 0.22% to 0.31% depending on their investment choice — that's $0.22 to $0.31 for every $100 in their account.These fees are deducted directly from employees' accounts.4
By comparison, a Gusto 401(k) doesn't charge employees a flat per-account fee on top of asset-based fees. Employees also get access to professionally managed portfolios, a broader range of investment options, and the ability to contribute pre-tax.
Gusto Starter 401(k) | New York Secure Choice | |
Retirement plan type | Starter 401(k) | Roth IRA |
Tax benefit | Pre or post-tax | Post-tax only |
Employee asset-based fee | 0.25%5 | 0.20%4 |
Additional active employee fees | None | $28/year account fee |
Professionally managed portfolios | 6 | 0 |
Investment options5 | 40 | 13 |
Exempt from IRS testing | Yes | Yes |
Scales to a standard 401(k) | Yes | No |
Monthly employer fee6 | $49/month + $6 per participant | Free |
Pros and cons of New York Secure Choice
New York Secure Choice removes a real barrier for employees who'd otherwise have no retirement savings option at work. But like any program, it comes with tradeoffs worth understanding before you decide how to comply.
Pros of New York Secure Choice | Cons of New York Secure Choice |
✅ No employer contributions or fees ✅ Meets state-mandated compliance ✅ Auto-enrollment can help improve employee participation ✅ Accessible for all employees, including part-time and seasonal workers | ❌ Roth only ❌ Lower contribution limits than most 401(k)s. ❌ No employer matching ❌ Limited investment options ❌ No loan option |
Do businesses have to use New York Secure Choice?
If your business already offers a qualified employer-sponsored retirement plan, you're exempt from the mandate. Qualifying plans include:
401(k) or other 401(a) plan
403(a) — qualified annuity plan
403(b) — tax-sheltered annuity plan
408(k) — Simplified Employee Pension (SEP) plan
408(p) — Savings Incentive Match Plan for Employees (SIMPLE IRA)
457(b) — governmental tax-deferred compensation plan
One thing to note: being exempt doesn't mean you can simply do nothing. Employers with a qualifying plan still need to certify their exemption through the New York Secure Choice portal. You'll need your access code (provided in the notification you receive from the program) and your Federal Employer Identification Number (FEIN) to do so.
Why many employers choose a 401(k) instead of New York Secure Choice
While New York Secure Choice fulfills the mandate at no cost, many employers opt for a 401(k) instead. A 401(k) can offer more for both employers and employees, often without costing as much as you'd expect.
Higher contribution limits: Employees can contribute up to $24,500 to a 401(k) in 2026, more than three times the $7,500 IRA limit. Those 50 and older can contribute up to $32,500, and employees ages 60–63 can put away up to $35,750 under the SECURE 2.0 super catch-up provision.3
Employer matching: Unlike New York Secure Choice, a 401(k) lets employers match employee contributions, which can be a meaningful recruiting and retention advantage. Gusto research has found that 70% of employers say a 401(k) has positively impacted their ability to recruit and hire talent.8
Pre-tax and Roth options: A 401(k) can support both traditional pre-tax contributions and Roth after-tax contributions, giving employees more flexibility in how they save.
Significant tax credits: Thanks to the SECURE 2.0 Act, eligible small businesses can claim up to $16,500 in tax credits over the first three years of offering a 401(k) — potentially covering 100% of plan costs.7
Payroll and retirement all in one place: With Gusto, payroll and 401(k) live in the same platform — no separate tools, no manual syncing.
FAQs
Which New York employers are required to participate in the New York Secure Choice program?
The mandate applies to businesses that have been registered in New York for at least two years, employed at least 10 people throughout the previous calendar year, and don't already offer a qualified employer-sponsored retirement plan. Both for-profit and nonprofit businesses are covered.
Can employees opt out of New York Secure Choice?
Yes. Employees have 30 days after automatic enrollment to opt out. If they don't, they'll be enrolled in a Roth IRA with a default contribution rate of 3% of gross pay. They can adjust their contribution rate or opt back in at any time.
What is the default contribution rate for New York Secure Choice?
The default contribution rate is 3% of gross pay. Employees can change this to a different percentage or a flat dollar amount at any time, up to the annual IRS limit ($7,500 for those under 50; $8,600 for those 50 and older in 2026).
Does offering a 401(k) exempt my business from New York Secure Choice?
Yes. Businesses that already provide a qualifying employer-sponsored retirement plan — including a 401(k), 403(b), SEP IRA, SIMPLE IRA, or similar plan — are exempt from the mandate. However, you'll need to certify your exemption through the New York Secure Choice portal using the access code from your program notification and your Federal Employer Identification Number (FEIN).
Disclosures
Gusto Retirement Services, LLC, Gusto Inc.’s affiliate, has prepared this summary from third-party sources as of June 2026. The information herein is considered to be reliable at the time of writing, may not necessarily be all-inclusive, is not guaranteed as to accuracy and is subject to change at any time without notice.
The information provided herein is general in nature and is for informational purposes only. It should not be used as a substitute for specific tax, legal and/or financial advice that considers all relevant facts and circumstances. You are advised to consult a qualified financial adviser or tax professional before relying on the information provided herein. Deadlines, fees, and other program details are subject to change by the state without notice and should be checked prior to making any decisions. If you already offer a qualified employer-sponsored plan, exemptions may be required. Please consult with your state's specific exemption information (https://www.securechoice.ny.gov/) for more details.
1 The New York mandated registration deadlines for employers who have been in business for at least two years, do not already offer a retirement plan, and have 30+ employees was March 18, 2026, 15-29 employees is May 15, 2026, and 10-14 employees is July 15, 2026. Requirements to report your exemption apply. Gusto has prepared this summary from third-party sources as of June 2026. The information herein is considered to be reliable at the time of writing, may not necessarily be all-inclusive, is not guaranteed as to accuracy and is subject to change at any time without notice. The information provided herein is general in nature and is for informational purposes only. It should not be used as a substitute for specific tax, legal and/or financial advice that considers all relevant facts and circumstances. Investing involves risk and investments may lose value. You are advised to consult a qualified financial adviser or tax professional before relying on the information provided herein. Deadlines, fees, and other program details are subject to change by the state without notice and should be checked prior to making any decisions. Visit the New York Secure Choice site to learn more.
2 Roth contributions are always distributed tax-free. The earnings on Roth contributions will generally be tax-free if the following conditions are met: (a) you’re either over age 59 ½, disabled, or have died AND (b) it has been 5 years since your first Roth contribution under the current plan. Please consult a qualified financial advisor or tax professional to determine what is applicable to your financial situation.
3 May be adjusted annually to account for IRS cost-of-living adjustments. Learn more.
4 New York Secure Choice charges an assumed annual asset-based fee of between 0.22% and 0.31% (0.02%–0.11% Underlying Investment Fee and a 0.20% Program Administration Fee) on assets under management as of July 2025, according to the New York Secure Choice Program Description. In addition, an annual account fee of $28.00 per year (charged quarterly at $7.00) is payable to the program administrator, plus $1.00 per year payable to the New York State Secure Choice Savings Program (currently waived until program participation exceeds 350,000 funded accounts). The Program Administration Fee is payable to the program administrator for providing recordkeeping and administrative services for the program pursuant to a contract with the Board. The Program Administration Fee accrues daily, is paid quarterly, and is factored into each investment option's unit value. An additional 0.05% fee payable to the New York State Secure Choice Savings Program is also waived until program participation exceeds 350,000 funded accounts. Fees are subject to change at any time without notice and should be checked prior to making any decision.
5 Investment advisory services for Gusto’s 401(k) product (when 3(38) fiduciary services are appointed) and SEP IRA/IRA products are offered by Gusto Investment Services, LLC, an affiliated SEC-registered investment adviser. An assumed annual account fee of 0.25% is applied to assets under management and is deducted on a monthly basis. It’s calculated at 1/12 of the annual stated rate (0.25%) based on the account balance on the last day of each month. Alternative account fee pricing is available, ranging from 0.15% to 0.35%. See Form ADV 2A Brochure for more information regarding these fees.
6Alternatively priced plan tiers are also available. Go to https://retirement.gusto.com/pricing for further information. You should consult a tax professional and/or Financial Advisor to determine the best tax advantaged retirement plan for your situation.
7 You should consult a tax professional to determine what types of tax credits or deductions your company is eligible to claim. Tax credit services are provided by Gusto, Inc. Please contact a financial, tax, and/or legal advisor to determine what applications and products are appropriate for your specific circumstance. Gusto does not act as a fiduciary when providing this service.
8 Research run by Gusto Retirement (formerly Guideline) using Suzy research insights based on data collected Dec 2023-Jan 2024, from a survey of 776 US-based respondents. Guideline was not identified as the survey sponsor. Though the survey is broad in scope, the experiences of the respondents in this survey may not be representative of all people.
