Small business owners in New York, listen up! Did you know that if you have at least 10 employees and meet a couple of other basic requirements, you’re required by state law to offer retirement options to your employees? Yes, even part-time employees count towards that 10 employee limit! 

We’re talking about the New York Secure Choice Savings Program, and the related legislation was signed in October 2021 as a way to protect workers employed by small businesses in the state. Currently, if you are a private sector employer and meet the requirements, you’re required to automatically enroll your employees in the New York State Secure Choice Savings Plan.

But, what if you don’t want to? What if you employees don’t want to participate in the retirement program or contribute to their retirement account? Let’s go through the requirements a small business has to meet first to make enrollment mandatory. Then, let’s explore your options and some alternatives to the New York Secure Choice Savings Program.

Not interested in a state-run option like the New York Secure Choice Savings Program? Check out our managed IRA plans, which start out at just $49/month plus $7/employee.

What is the New York Secure Choice Savings Program?

As mentioned above, the New York Secure Choice Savings Program is a program created and provided by the State of New York to help private sector employees of small businesses save for retirement.

We’ll go over the exact qualifications below, but if you meet the three basic qualifications (namely, if you have 10 or more employees), you’re required by state law to offer a retirement plan for your employees.

The New York Secure Choice Savings Program is one such plan that you can automatically enroll your employees in at no cost to you. They’ll get IRA plans created and set up in their name, but who oversees those accounts? Not you! The program is managed by the New York State Secure Choice Savings Board and the Department of Taxation and Finance oversees the implementation of all aspects of the program.

Not interested in a state-run option like the New York Secure Choice Savings Program? Check out our managed IRA plans, which start out at just $49/month plus $7/employee.

Does My Small Business Qualify for the New York Secure Choice Savings Program?

In California, for example, you simply have to have more than five employees on the payroll (and a few small other requirements; click here to learn more about those if you’re a small business owner in California), but in New York, the qualification for this state-run retirement program looks a little different. 

There are three main requirements you’ll need to meet to make sure you’re eligible (or, better said, required to apply for) for the New York Secure Choice Savings Program. Those are:

• Have been in business for at least two years. 
• Have at least 10 employees in the state of New York at all times during the previous calendar year. This means that if you had eight employees all year long and then hired two new people in November, you technically aren’t required to participate in the program.
• Have not already offered your employees another qualified retirement plan option such as a 401(k) or similar plan during the last two years.

If you meet all of those requirements then it’s mandatory that you participate in the New York Secure Choice Savings Program OR that you offer a similar retirement plan option to your employees.

Not interested in a state-run option like the New York Secure Choice Savings Program? Check out our managed IRA plans, which start out at just $49/month plus $7/employee.

Are My Employees Required to Participate?

No, they’re not! While you do technically have to automatically enroll them and provide an enrollment period each year, they are able to opt out if they want to. The requirement is more so in place so that they have the option to participate if they want.

What happens if they do participate, though? The State of New York covers all administrative costs associated with managing the program, so as an employer, you don’t have to pay anything to participate in the New York Secure Choice Savings Program (more on that below, though, because that doesn’t necessarily mean it’s the best option for your business).

When employees are enrolled in the program, the default percentage chosen is 3% of their wages. Because the account created is an IRA account, 30 days after enrollment, they’ll start having 3% of their wages deducted from their paycheck monthly and deposited straight into their IRA account for them (note: this isn’t a SEP IRA, but you can learn about those here). Neither the employee nor you have to do anything outside of that, really!

Not interested in a state-run option like the New York Secure Choice Savings Program? Check out our managed IRA plans, which start out at just $49/month plus $7/employee.

How to Apply for the New York Secure Choice Savings Program

Currently, we’re all still waiting on more specifics regarding the enrollment process for this program. The state law says that employers must enroll no later than nine months after enrollment begins. However, as of the writing of this article, enrollment hasn’t officially begun! The bill supposedly calls for enrollment to open by December 31st, 2021, so we’ll have to wait and see.

Not interested in a state-run option like the New York Secure Choice Savings Program? Check out our managed IRA plans, which start out at just $49/month plus $7/employee.

Who Manages the IRAs Through the New York State Mandated Retirement Plan?

The program is managed by the New York State Secure Choice Savings Board. It’s currently unclear who sits on that board, which means that it’s hard to know just who is managing your employees’ retirement accounts.

While they surely have experience in finance, it would be more beneficial if we knew for certain that at least one person on the board had expert experience in managing large portfolios in a way that can help them grow exponentially over time. Furthermore, it’s impossible for the few people on the board to personally manage every single retirement account across the state.

So, are the retirement accounts good? IRAs are great, sure, but what you’re really looking for is a managed IRA plan that is being personally managed by an expert investment professional. The Wealth Stack Growth Pack offers just that, along with:

• High-quality investment education for your employees
• Investment recommendations from a seasoned Wall Street professional
• Access to digital financial advisory tools
• Access to alternative sources of capital to help you increase the value of your business
• FREE financial assessment and review of your business

Do SMB Owners in New York Have Other Options?

The New York Secure Choice Savings Program isn’t the only retirement option available to small business owners. If you want to offer your employees great retirement solutions while also ensuring that the accounts they’re investing in are going to actually grow long-term and help them build wealth, try the Wealth Stack Growth Pack.

Wealth Stack has plenty of tools at your disposal, including providing access to financial counselors who will walk alongside you and your workers as they educate themselves about all aspects necessary when investing in their retirement portfolios. And, Wealth Stack retirement accounts are managed by an expert investor and former hedge fund manager.

Not only that, but we also:

• Take care of the paperwork and direct deposit setup for you
• Offer access to alternative sources of capital that can help you grow other areas of your business
• Help you learn how to effectively invest in your own business with that capital to see maximum growth

With a library of over 100 videos and articles on everything from investing to retirement planning and personal finance tips, we’re your one-stop-shop for all financial-related questions. You literally won’t find this anywhere else.

Click here to learn more about the Wealth Stack Growth Pack and to schedule your free consultation with a professional today.