Are Your Clients Aware of the New York Secure Choice Savings Program?

New York is tentatively scheduled to launch its state-administered Roth IRA savings program, Secure Choice in December of 2024. Your New York clients with 10 or more employees can consider enrolling in Secure Choice, or a provide employees with a qualifying alternative such as an ePlan Services 401(k) retirement plan. Employers failing to comply with the mandate run the risk of facing penalties in the future. We’ll provide the information you need to properly prepare your clients for this implementation.

Key Takeaways:

• New York’s Secure Choice Savings Program is being developed for employees who don’t have access to a retirement savings account.
• States throughout the U.S. are mandating retirement plans, now is your chance to help your clients prepare in advance.
• ePlan Services can benefit your clients financially and help boost your book of business.

What is the New York Secure Choice Savings Program? Currently, there are approximately 3.5 million New York workers without access to a retirement plan. New York’s state government is creating the Secure Choice Savings Program to address this issue. The New York state mandate requires certain employers to enroll their employees in the program or provide another qualifying option like a 401(k). Businesses fall under the retirement savings mandate if they:

• Have 10 or more employees and,
• Have been in business for at least two years.

If your clients meet these requirements, they must offer their employees (aged 18 or over), a retirement savings benefit. The benefit must either be registration in the NY Secure Choice Program or employers may offer an alternative qualified retirement plan, such as an ePlan Services 401(k) plan. With either option, employees may meet the criteria to become plan participants, their participation isn’t mandatory. Employees can decide to opt out if they wish.

Do your clients have other beneficial options?

For now, Secure Choice is still being developed and does not yet have a deadline for enrollment; but that can change at any time. You can help your clients prepare for the eventual deadline by presenting them with the best plan options for their businesses.

While a state-administered Roth IRA program may seem like an easy choice, your client would lack the flexibility to manage the plan, make changes, or add employer matching or profit sharing contributions. Additionally, Roth IRAs have lower contribution limits than a 401(k) retirement plan and they don’t qualify for tax credits.

A state-administered savings program has a contribution limit for employees of $7,000 and $1,000 in catchup contributions compared to a 401(k) retirement plan that allows for much greater contribution amounts of up to $23,000 and $7,500 in catchup contributions (2024). Additionally, providing a qualifying retirement plan offers significant SECURE Act tax credits for starting a plan and adding employer contribution and auto-enrollment options.

How can ePlan Services boost your business?

As a financial advisor, you understand the importance of having the trust of your clients. Collaborating with ePlan Services will allow you to provide your clients with the tools they need to help them stay compliant with state laws while you continue to gain new clients.

Don’t just encourage your clients to adopt an ePlan Services 401(k) plan, show them how much they can save in tax credits with our tax credit estimator. Imagine how thrilled they’ll be to see their savings potential in real-time. Your clients may feel more inclined to choose an ePlan Services retirement plan and they may also recommend your services to their business networks—a win for everyone.

Conclusion:

You have a unique opportunity to help your clients get a head start in providing their employees with a retirement savings option. If your clients decide to enroll in an ePlan Services retirement plan now, they can avoid tons of paperwork, headaches, and potential fines later. Now is your chance to show them all they have to gain with ePlan Services.