New York State launches retirement savings program for private-sector workers without access to 401(k)s, other plans

Private-sector employees across New York State now have a new option to save for retirement if their employer doesn’t offer a 401(k) or another workplace savings plan, Gov. Kathy Hochul announced Wednesday.

She said the state’s Secure Choice Savings Program is expanding statewide after an initial test proved successful. The program is mandatory, though employers can seek an exemption and employees can opt out.

Secure Choice requires employers to deduct at least 3% of an employee’s gross pay for their Roth Individual Retirement Account. The deduction amount may be changed by the worker at anytime and the retirement account accompanies them if they change employers, according to the program description.

“The program provides another tool for employees to build long-term financial security and plan for a dignified retirement,” Hochul said, adding that more than 1.5 million workers are eligible for Secure Choice.

Employers don’t make matching contributions or assume fiduciary responsibility unlike with other retirement savings plans.

Secure Choice only covers employers that have been in business for two years or more, have 10 or fewer employees, and don’t offer a qualified retirement plan such as a 401(k) or 403(b).

Employees can choose from investment options such as BlackRock funds tied to their retirement year and State Street’s growth and income funds, the description states.

More information is available at newyorksecurechoice.com.

The program is overseen by the Department of Taxation and Finance, whose acting commissioner, Amanda Hiller, said the fact that payroll deductions are automatic will help “more New Yorkers take control of their financial future.”

Secure Choice was established four years ago when Hochul signed legislation into law.

That bill expanded an earlier program with the same name but was voluntary for employers. The 2018 program, introduced by then-Gov. Andrew M. Cuomo, was never implemented.

Assemb. Al Stirpe, (D-Cicero), chairman of the Assembly’s economic development committee, said Wednesday he was “eager” to see Secure Choice “finally launch from idea to implementation.”

Assemb. Rebecca A. Seawright, (D-Manhattan), chairwoman of the Assembly’s aging committee, agreed, adding in a statement that “too many older adults face economic insecurity in retirement because they lacked access to savings options during their working years.”