The Employer’s Guide to New York’s Secure Choice Savings Program

Living in New York comes with a high annual cost of $74,147 that is only overshadowed by how much New Yorkers need to save for retirement: a whopping $1,292,753 by age 65. That number can definitely give a person sticker shock, and for good reason. For many, that can not only feel like an impossible amount to reach, but can actually be unattainable when they lack access to a workplace retirement plan, as is the case for more than half of the state’s private-sector employees.  

This reality has underscored the need to equip individuals with better tools to save for their future. In response, the state introduced a mandate requiring businesses not offering employer-sponsored retirement plans to facilitate access to a state-sponsored retirement program, which is currently in development.

What is the New York Secure Choice Savings Program?

In 2021, the law for the New York State Secure Choice Savings Program (aka New York Secure Choice) was enacted by the state Senate and Assembly, and signed by Governor Kathy Hochul. That legislation created the mandate for a state-sponsored retirement savings program, which is overseen by the New York Secure Choice Savings Program Board. It applies to New York businesses (whether they’re for-profit or are nonprofits) that have been around for at least two years, have had at least 10 employees throughout the previous calendar year, and don’t already provide a qualified, employer-sponsored retirement plan. 

How does New York Secure Choice work?

The Secure Choice savings plan launch date hasn’t been set. Details are still in development, but interested and eligible employers can sign up now to participate in a pilot program. As the program administrator, Vestwell, will provide pilot employers with support, including:

• Informational material through webinars and interactive sessions
• Steps to complete the process and prepare for program registration
• 1:1 guidance for processing payroll contributions

When New York Secure Choice is active, all eligible employers (even small businesses that meet the criteria) will be able to register using a portal and add their employee information. Once they do that, their employees will then receive invitations from New York Secure Choice to access the individual retirement account (IRA), or they will be able to opt out of the program if they don’t want to participate. The default account type is a Roth IRA. Since contributions are made with after-tax dollars, the earnings from them are not taxed when distributions are taken after age 59½. 

Eligibility requirements for employees

To participate in New York Secure Choice, there is a simple set of requirements for eligible full-time or part-time employees who are on a W-2. They must be …

• 18 or older
• Employed in the state of New York
• Be a full-time employee, a part-time employee, or a business owner who is considered an employee.
• They must be eligible for a Roth IRA. For example, if someone’s modified adjusted gross income in 2025 is $150,000 or more if they’re filing taxes on their own, or it’s $236,000 or more for those filing joint taxes, then they may only be able to contribute a limited amount to a Roth IRA or won’t be able to contribute anything at all.

Enrollment and contribution options for employees

Employees will have 30 days to opt out of enrollment, and if they don’t, they’ll be automatically enrolled in the Roth IRA with a default contribution rate of 3% of their gross pay, unless they choose a separate amount. In addition, employees can automatically increase their contribution level up to 10%, as long as contribution limits set by the Internal Revenue Service (IRS) aren’t exceeded. That amount is the same for 2025 as it was for 2024: $7,000 for those age 49 and younger and $8,000 for those 50 and up, whether they’re single filers or married filing jointly

Understanding the investment options

New York Secure Choice is an automatic payroll deduction IRA with a default investment option. Employees will be able to select another choice among the other available options, pending no other changes by the New York Secure Choice Savings Program Board. The range of funds will be:

• Conservative Principal Protection Fund
  • A low-risk investment, this fund is designed to maintain capital, prevent portfolio loss, and provide an income with cash and high-quality, short-term securities. 
• Target Retirement Date Funds
  • The diversified asset allocation of the fund and its risk profile change dynamically based on how far out someone is from their retirement date, according to their birth date. The closer someone gets to their retirement, the more the fund focuses on income generation and preserving its capital.
• Growth Fund
  • A higher risk fund, it’s also associated with long-term growth, passively invested in large capitalization US common stocks for companies valued at more than $10 billion.
• Growth and Income Fund
  • For a long-term moderate amount of growth of capital and some income, this fund passively invests in high-quality government, corporate, and mortgage-related bonds with low to moderate risk.  

What employers need to know about New York Secure Choice

Eligibility requirements for employers

• Be no less than two years in business and registered in New York
• Have had at least 10 employees
• Not already provide an employer-sponsored and qualified retirement plan

Employer responsibilities with New York Secure Choice

The intention of the simple plan design is for it to be as easy as possible for employers to facilitate, although they have no oversight over it, have no fiduciary for it, and are not responsible for it. This means participating New York employers don’t need to worry about the following:

• Establishing Roth IRAs for employees
• Answering questions or sending communications about the program, investment options, or deadlines
• Managing investments or change requests
• Processing retirement distributions
• Handle employee account changes

This summary of dos and don’ts also provides an overview of the obligations employers do need to consider and what they don’t need to be concerned about:

Do	Don’t
Register your business by creating an employer account when you receive a notification, once the program is active	Provide tax advice, legal advice, investment advice, or financial advice, or manage employees’ personal information, including beneficiary details
Respond to questions about your payroll process, and share key onboarding details for existing and new employees with the program administrator, or have a payroll representative handle this for you	Promise a return on savings or any type of additional benefit
Update your participating employees’ contribution rates within your payroll once a 30-day period to opt out after automatic enrollment for employees has passed	Tell employees whether or not they should contribute to the program, or share opinions about it, and the Roth IRA maintained by it
Set up payroll deductions and remit employees’ contributions quickly to the program administrator	Contribute money to the program or match employee contributions
Maintain employee records, and keep your employees’ payroll contributions and staff list up to date for compliant recordkeeping	Offer assistance for determining eligibility for a Roth IRA

How to register your business for New York Secure Choice

Since the program isn’t active yet, registration isn’t required at this time. But when the program does launch and the open enrollment period for employers begins, here’s what you’ll need to provide:

• Employer information
  • New York Secure Choice Access Code from your notification
  • Business name
  • Federal Employer Identification Number (FEIN)
  • Company mailing address
  • Name, telephone number, and email address for the point of contact

• Employee information
  • Full legal name
  • Social Security number or individual taxpayer identification number.
  • Date of birth
  • Physical address and mailing address, if different
  • Email address, if available
  • Phone number, if available

Benefits of New York Secure Choice

People don’t have nearly enough or even much saved for when they stop working: 14% of workers have less than $1,000 in savings and investments, and a third of workers have less than $50,000, according to the Northwestern Mutual 2025 Planning & Progress Study. 

Saving for retirement is a priority for employees. According to the annual Vestwell Savings Industry Report from 2024, 85% of workers expect retirement benefits from their employers, and 89% are more likely to continue to work for them. Small employers shouldn’t lose top talent to large employers because they’re not meeting this need.

Gusto has discovered that employees are 20 percent more likely to invest in retirement when they work in a state with auto-enrollment policies. The Georgetown University McCourt School of Public Policy’s Center for Retirement Initiatives has also noticed an increase in the retirement plan market for small employers in states that have implemented Auto IRA mandates. In fact, 30,000 firms have established their own retirement plans. 

Do businesses have to use New York Secure Choice?

Businesses of 10 or more employees don’t have to enroll in New York Secure Choice if they’ve already been providing a retirement savings plan in the previous two years that meets the requirements to be exempted from the state’s own program. Suitable employer-sponsored examples that could be appropriate and satisfy the standards for an exemption include, but aren’t limited to:

• 401(k) plan 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 (a SIMPLE IRA plan)
• 457(b)—Governmental tax-deferred compensation plan

To claim an exemption after the New York Secure Choice Program launches and your business receives a notification, you’ll use your access code that you would’ve received and your FEIN. 

Retirement benefits made easy with Gusto

You don’t have to wait for New York Secure Choice to be live to offer a retirement savings program for your employees. A 401(k) plan can even offer more benefits and flexibility than the state-sponsored program. 

A Gusto 2023 analysis revealed that Colorado’s auto-IRA mandate for employers with five or more employees actually increased 401(k) adoption by 45%. It also uncovered that in Oregon, once the state’s mandate applied to employers with less than five employees, there was an increase in employers with one to four employees offering 401(k) plans: 7.1% offered a 401(k) in 2022 versus 11.3% in 2023. 

Here are some benefits of offering a 401(k):

• Reduced cost with tax credits: Eligible businesses may be able to claim up to $16,500 in tax credits for the first 3 years of their 401(k)—potentially covering 100% of plan costs. 
• Flexible and affordable plan options: Gusto’s growing list of 401(k) partners means plenty of plans to choose from at low price points to fit your budget.
• Integrated to make life easier: Gusto payroll syncs with your 401(k) plan to make automatic deductions. Employees manage their own Gusto accounts, with access to their pay stubs, W-2s, 401(k) accounts, and contribution details. 
• Great benefits help you build a great team: Because 401(k) plans have higher contribution limits, employees can save more money with an employer-sponsored 401(k) than with state-mandated IRAs. Gusto’s own research has even found that employer-sponsored 401(k) offerings increase employee retention.

This table lines up the features of a 401(k) versus what’s currently known about what New York Secure Choice will provide to help you determine what could be the best retirement program for your business: 

Features	401(k)	New York Secure Choice
Auto-enroll	Available	3%
Auto-escalation	Available	Up to 10% each year
Automated payroll deductions	Available	Yes
Investment options	A large range of funds that vary based on the provider	To be determined (TBD)
Employer matching and profit-sharing contributions	Available	No
Investment advice	Available	No
Taxability	Pre-tax and after-tax contributions are available	Roth after-tax contributions
Annual contribution limit	$23,500 for employees ($31,000 for those 50 and older; $34,750 for those ages 60 through 63), plus optional employer contributions	$7,000 for employees ($8,000 for those 50 and over)
Participant fees	Varies, but often ranges between 0.5% and 2% of the plan balance annually	TBD

If you have an existing Gusto account, learn more about our 401(k) partners here.

You can also create an account with Gusto to enroll in a 401(k) plan. Gusto’s platform makes that simple.