If you operate in New York and have 10+ employees, retirement compliance is no longer optional. It’s a 2026 must do.

New York’s Secure Choice Savings Program (SCSP) requires covered employers to register and facilitate payroll deduction Roth IRAs for employees who don’t already have access to a workplace retirement plan.

Deadlines are phased by employer size, and enforcement begins in 2026.

VensureHR’s Chief Retirement Officer Jere El-Bakri laid out his predictions for what business owners might experience if they get hit with a noncompliance notice with this New York retirement mandate.

“First, the notice will cause panic, because a lot of business owners don’t know what it means, how much it will cost them, and who to call,” El-Bakri said. “What worries me is that business owners will default to the easiest plan rather than what’s best for them and their employees.”

Failing to comply can result in escalating penalties, so for business owners, understanding your options and acting early are critical.

Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or investment advice. Please consult your advisors.

What’s Changing with the New York Retirement Mandate and Why it Matters

Under the Secure Choice program, covered employers must:

• Register with the state by deadlines based on company size.
• Auto-enroll employees at a default 3% contribution rate into a Roth IRA.
• Begin payroll deductions 30 days after hire or notification, unless employees opt out.

Key deadlines:

• 30+ employees: March 18, 2026
• 15–29 employees: May 15, 2026
• 10–14 employees: July 15, 2026

How employee enrollment works: Employees are auto enrolled with a default 3% contribution to their Roth IRA unless they opt out. Payroll deductions start after a 30-day notification period. Employers cannot make matching contributions to state IRAs.

Penalties for noncompliance: Advisory summaries indicate escalating fines—from $250 per employee for initial violations up to $1,000 per employee for repeated violations—plus additional recordkeeping penalties if requirements aren’t met. (Consult counsel and monitor state guidance as enforcement details finalize.)

Why This Matters for Employers

While the state IRA offers a compliance path, it comes with limitations:

• No employer match allowed
• Lower contribution limits compared to 401(k) plans
• Administrative burden for small businesses
• No eligibility for federal tax credits under the SECURE Act

Compliance Timeline At a Glance

Early 2026      New York begins notifying covered employers with EIN + Access Cod

Mar 18, 2026    Registration deadline for employers with 30+ employees

May 15, 2026    Registration deadline for employers with 15–29 employees

Jul 15, 2026    Registration deadline for employers with 10–14 employees

+30 days        After each employee is added, a 30‑day notice period runs before post-enrollment payroll deductions begin at the default 3% to a Roth IRA, unless the employee opts out or customizes.

Alternative Solutions: PEO, ASO, and Pooled Employer Plans

Employers seeking a more strategic approach can consider:

PEO (Professional Employer Organization)

A PEO model provides comprehensive HR outsourcing under a co-employment arrangement. This includes payroll, benefits, compliance management, and retirement plan administration—reducing risk and freeing internal resources.

ASO (Administrative Services Organization)

For businesses that prefer to retain full employer status, ASO services offer managed HR and compliance support without co-employment. This includes payroll integration, retirement plan operations, and regulatory filings.

Pooled Employer Plan (PEP)

PEPs allow multiple employers to participate in a single 401(k) plan, simplifying administration and reducing fiduciary risk. Key advantages:

• Low-cost, streamlined administration
• No mandatory employer match (optional if desired)
• Integrated payroll for automated deductions
• Fiduciary oversight through pooled governance
• Access to SECURE Act tax credits, including:
  • Up to 100% of startup/admin costs for the first three years (for businesses with ≤50 employees)
  • Up to $1,000 per employee per year to offset match costs for employees earning ≤$100,000

These credits are not available for the state IRA.

New York State IRA vs. PEP: What’s the Smarter Path?

Feature	New York Secure Choice (State IRA)	Vensure PEP (Qualified 401(k))
Plan Type	Roth IRA via payroll deduction; employee‑owned	Qualified 401(k) under SECURE/SECURE 2.0. Allows Participants to Contribute Pre-Tax or Roth
Default Contribution	3% of gross pay; auto‑enrollment; 30‑day notice before deductions	Flexible auto‑enroll options; employer‑selected defaults
Employer Match	Not permitted	Optional (design to budget and goals)
Tax Credits	Not eligible for SECURE Act small‑employer credits	Eligible: startup/admin (up to 100% for ≤50 employees, up to statutory limits), plus contribution credit (up to $1,000/employee/year, phasing)
Investment Menu	Default conservative option for 30 days, then target‑date fund unless changed	Broad, institutional menus; fiduciary support via pooled governance
Admin Burden	Employer must register, track opt‑outs/changes, remit each pay period	PEO/ASO offload: plan admin, payroll integration, notices, vendor coordination
Employee Value	Portable IRA; no employer match; IRA limits/income phase‑outs	Higher contribution limits; potential employer contributions; better retention value
Compliance Risk	Penalties for missed deadlines and recordkeeping	VensureHR tracks milestones, filings, and plan operations
Exemption Path	Existing qualified plan can certify exemption	Adopt Vensure PEP to qualify for exemption from State IRA

Action Plan for NY Businesses

• Assess Coverage: Determine if you meet the criteria for Secure Choice.
• Choose Your Path: State IRA or a qualified plan like a PEP.
• Implement & Communicate: Ensure timely enrollment and payroll integration.
• Maintain Compliance: Track contributions, opt-outs, and filings.

Frequently asked compliance questions (2026)

El-Bakri and his team of retirement professionals encourage business owners to know these common FAQs around the new compliance measures:

Do seasonal/parttime employees count toward the 10-employee threshold?

Yes—advisory guidance notes they count toward eligibility in determining covered status.

If we already offer a qualified plan, do we still need to do anything?

Yes—certify your exemption via the Secure Choice portal using your EIN and Access Code.

Can the state IRA receive employer matches?

No—matches are not permitted under Secure Choice.

Are SECURE Act credits available for the state IRA?

No—SECURE/SECURE 2.0 credits apply to qualified plans (e.g., 401(k), SEP, SIMPLE), not to payroll deduction IRAs.

Don’t wait—New York notifications begin soon!

You’ve got the facts—and the timeline. Now put that knowledge to work.

“Business owners have the opportunity skip the ‘bare minimum’ solutions and get to the heart of what’s optimal for their businesses,” El-Bakri explained. “There’s no reason to be scared of this change, especially when Vensure makes it easier than ever to offer a competitive pooled employer plan.”

Explore VensureHR’s New York PEO/ASO and PEP solutions today. We’ll help you certify your exemption, capture SECURE Act tax credits, and keep you fully compliant with Secure Choice without the hassle.