On October 21, 2021, New York Governor Kathy Hochul amended the state’s existing Secure Choice Saving Plan from a voluntary to a mandatory program.
New York Secure Choice Savings Overview
The 2021 amendments to the New York Secure Choice Savings Program (SCSP) make participation mandatory for covered employers and require businesses to automatically enroll employees who don’t opt-out.
The Department of Taxation and Finance has been tasked with the program’s development. A timeline has not yet been announced but once the program is open for enrollment, employers will have up to 9 months to establish payroll deposits.
Here are some common questions in regard to New York SCSP.
Who Is Covered Under SCSP?
Covered employers are those who do not currently offer a qualified retirement plan, those with 10 or more employees in the previous year, and have been in business for at least two years.
Are Employers Required to Contribute?
Employers cannot match employee contributions through the Secure Choice Savings Program. Employers who are interested in providing an employer match should consider offering a 401(k) plan.
When Do New Hires Need to be Enrolled?
At this time, there is no timeframe listed by the Program’s board in which new hires should enroll in the plan. The employer should also have a set open enrollment time each year for all employees to enroll, change contributions, or opt out of enrollment. Payroll deductions will begin following the 30th day an employee has been enrolled in the program.
How Do Employees Opt Out of Plan Participation?
Companies must provide a form to employees on which they may opt out of participation in the Program or elect to participate at a level other than 3%. Should the form not be provided by the Program, the Employer must create a form for the employee to either opt out of participation or elect to participate at a level other than 3%. Both options may be available to employees on one form or on two separate forms. Employers must be sure to provide employees with a State provided disclosure form and other State provided materials that include necessary information categories listed in the statute.
Where Should Employers and Employees Go for Other Questions on New York SCSP?
Employers with questions regarding the Program should contact the New York State Secure Choice Savings Board. If there are specific questions regarding contribution amounts and retirement, please refer to an accountant
What's Next for EBC Clients?
Are employers required to tell EBC they enrolled or should EBC be telling the employers when to enroll?
We may inform our clients when the enrollment has been opened up by the Program’s board. However, employers have 9 months after the opening of enrollment by the board to enable employee participation. Clients should tell EBC when their employees have been enrolled because payroll deductions will begin following the 30th day an employee has been enrolled in the program.
For more information on the New York Secure Choice Savings Program contact us today or take a closer look at how our payroll solution can help keep you prepared for collecting deductions.
