M&T Bank Reminds Small Businesses of March 18 Deadline for New York State Retirement Savings Program

Every business in New York State with 10 employees or more will soon be required to offer retirement savings plan options to their workforce. M&T Bank and its investment management division Wilmington Trust have been assisting small businesses across the state to ensure compliance with the newly implemented regulations.

“The New York State Secure Choice Savings Program will make it easier for employees of small businesses to save for retirement – but it also brings administrative requirements that employers need to meet before some fast-approaching deadlines,” said Joe Carew, Head of Retirement Advisory Services for Wilmington Trust. “We want to remind local small business leaders that the state’s registration process needs to be completed as soon as March 18.”

Addressing New York’s Retirement Savings Gap

About 3.9 million New Yorkers don’t have access to a retirement plan through work – that’s more than 50% of all private-sector employees in the state. Multiple analyses have also found New York to be one of the more challenging states to stretch your retirement savings.

To help address this gap, Governor Kathy Hochul signed legislation in 2021 requiring private-sector employers to provide retirement plans. Businesses that don’t offer retirement options will need to automatically enroll employees in the New York State Secure Choice Savings Program, a state-facilitated retirement plan.

What’s Next for Small Businesses

Small businesses must complete a required registration process with the state – and then they’ll have two options:

1. Enroll employees in the NYS Secure Choice Savings Program. There’s no cost to employers, but they will need to facilitate contributions and maintain accurate employee records.
2. Adopt their own employer-sponsored retirement plan. With the federal tax credits available to offset startup costs, launching a 401(k) plan could provide enhanced benefits and greater flexibility for employees – while also serving as a recruitment tool for employers. 

Employers that already offer a retirement plan still need to register to secure their exemption at NewYorkSecureChoice.com.

Registration needs to be completed by:

• March 18 for businesses with 30 employees or more
• May 15 for businesses with 15-29 employees
• July 15 for businesses with 10-14 employees

Small businesses that miss the deadline or don’t register can face fines and penalties.

What Employees Can Expect

For employees of companies that adopt the NYS Secure Choice Savings Program, they will be automatically enrolled in a Roth IRA funded through payroll deductions, a reliable vehicle for retirement savings.

Employees will still be in control – they can opt out or change their contributions. Auto-enrollment will simply encourage people to start saving. 

There are some limitations to this savings program. No employer contributions are permitted into the plan. Annual Roth IRA limits apply – $7500 for employees under 50 years old and $8600 for those over 50. Additionally, higher-income earners who make over $168,000 are not eligible to participate.

Where to Turn for Assistance

Small businesses and their employees can visit newyorksecurechoice.com to find more program details, FAQs, investment options and other resources.

Employers interested in launching their own retirement plan should contact their banking or benefits provider. M&T Bank and Wilmington Trust have been working with businesses statewide to set up and manage employer-sponsored retirement programs – one of several services they provide small businesses ranging from SBA lending and cash management to succession planning and industry-specific solutions.

Wilmington Trust Retirement Advisory Services professionals do not provide legal or tax advice. Please consult your own professionals specializing in those areas, as appropriate or desired.  Wilmington Trust is a registered service mark used in connection with various fiduciary and non-fiduciary services offered by certain subsidiaries of M&T Bank Corporation.

This material contains links to external websites. These links are provided for informational purposes only. Wilmington Trust is not responsible for the content or completeness of information on external sites and does not guarantee its accuracy.

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