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New York-based employers that don’t already offer a qualified retirement savings program to their workers will be required to enroll them in a state-sponsored Roth Individual Retirement Account (IRA) starting next year.
The requirement stems from a bill passed by the New York State Senate in 2021, which amended the state’s General Business Law to establish the program. Gov. Hochul only recently announced the launch of the program, titled the New York State Secure Choice Retirement Savings Program, on Oct. 8.
New York is the latest state to enact an “auto-IRA” program to improve access to employer-sponsored retirement benefits.
How New York’s Secure Choice program will work. Private-sector employers with 10 or more employees who have done business in the state for at least two years will be required to enroll their workers in the Secure Choice program by sometime next year. Employers with 10–14 employees have until July 15, 2026 to register, while those with 15–29 have until May 15, and those with 30 or more have until March 18.
Employees who are 18 and older will be enrolled in the Roth IRA program at a default contribution rate of 3%, though they can put up to 10% of their wages into the account. While enrollment is automatic, workers can opt out of the program at any time. They can also choose to “auto-escalate,” or gradually increase their contribution rate automatically, each year.
The New York-provided Roth IRA is portable, meaning employees control it, and can continue to contribute to it if they move jobs. Employers won’t be considered fiduciaries of the plans, nor will they be required to contribute to them.
Businesses that are expected to register for the program will be notified by the state, which will provide access codes.
All in for auto-enroll. Twenty states have now enacted “work-and-save” programs similar to New York’s, according to tracking by the American Association of Retired Persons, which has lobbied for such legislation.
These laws are seen as one potential solution to the retirement crisis, which refers to shifting demographic and economic trends that are negatively affecting Americans’ ability to save enough to stop working one day. Some 42% of Americans working full-time lacked access to a retirement plan as of 2024, according to an Economic Innovation Group analysis.
“We know that having access to an employer-sponsored retirement savings plan makes it significantly more likely, 15 times more likely, that a worker is going to be saving for retirement,” Angela Antonelli, executive director and founder of the Center for Retirement Initiatives at Georgetown’s McCourt School of Public Policy, recently told HR Brew.
Antonelli said she and her colleagues had advocated for programs like the one in New York, and expressed optimism that features like auto-enrollment and auto-escalation could “really help make a difference in encouraging workers, not only to start to save,” but also boost “how much they save.”