A New York state automatic individual retirement account (IRA) program officially went live this week, offering long-term savings to private workers without retirement plan access.
The New York State Secure Choice Savings Program is available to private-sector businesses in New York with ten or more employees at workplaces who don’t currently offer a retirement plan. Workers are automatically enrolled into a Roth IRA, where they can then contribute directly from their paychecks.
Per a release, the program will be administered by fintech platform Vestwell, who will provide recordkeeping, custodial, and administrative services.
Vestwell already administers 85% of government retirement programs, including those in Vermont and New Jersey, and a few interstate partnerships with Colorado and New Mexico, and Rhode Island and Connecticut, among others.
“This is how public and private sectors come together to make a real impact, by making saving simple for employers and accessible for workers who’ve historically had no on-ramp. Adding New York to our growing partnerships and completing all three tri-state programs means millions more New Yorkers can start building the secure financial future they deserve,” said Aaron Schumm, founder & CEO of Vestwell.
The company currently works with over 1.5 million savers across over 350,000 businesses nationwide and holds $35 billion in client assets.
New York’s Secure Choice program comes at a pivotal time for government run platforms. A study by the Georgetown University Center for Retirement Initiatives found that state-run programs have a positive impact on retirement readiness, including “meaningful program participation and increased private sector plan formation, which is beginning to help close the access gap in those states.”
According to the study, 20 states have established government programs today.
Workers are keen on the programs too. Findings from the National Institute on Retirement Security (NIRS) reports that 77% of workers support state-run retirement initiatives.