How do state mandatory retirement savings programs work?
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If you run an HVACR contracting business and don’t currently offer employees a retirement plan, you may already have a compliance deadline on your calendar — whether you know it or not.
A growing number of states now require private-sector employers to automatically enroll workers in a state-facilitated retirement savings account. New York became one of the latest to hit the enforcement phase, with its first deadline arriving on March 16, 2026. But New York is far from alone. Active programs are already in place in California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, New Jersey, Oregon, Vermont, and Virginia — and more states are moving in the same direction.
New York Secure Choice Savings Program: what contractors need to know
New York’s program — officially the New York Secure Choice Savings Program — applies to private-sector employers that have been in business for at least two years and employed 10 or more workers in the state over the past 12 months. Eligible employees are those 18 and older who receive taxable wages. The rollout is phased by employer size:
- 30 or more employees: March 16, 2026
- 15–29 employees: May 15, 2026
- 11–14 employees: July 15, 2026
Penalties for non-compliance haven’t been spelled out in detail yet, but the Secure Choice Savings Program Board has the authority to enforce them. New York contractors should monitor securechoice.ny.gov for updates as deadlines approach.
How state mandatory retirement savings programs work for employers
While program details vary by state, the core structure is consistent. Covered employers must automatically enroll eligible workers in a state-facilitated Roth IRA and facilitate payroll deductions at a default contribution rate, usually around 3% of gross wages.
The key exemption: if you already sponsor a qualifying retirement plan — such as a 401(k) or SIMPLE IRA — you’re generally exempt from your state’s mandate. You cannot, however, drop an existing plan specifically to replace it with a state program.
HVACR contractor retirement plan compliance checklist
Whether your state has an active mandate today or is still working toward one, now is a good time to take stock:
- Confirm whether your state has an active program or pending legislation. Requirements and deadlines vary, and some states are already in enforcement mode.
- Check whether your existing benefits qualify for an exemption. If you’re unsure, your plan administrator or a qualified HR or employment law professional can help you verify.
- Review your payroll setup. These programs require automatic enrollment and deduction processing, which may mean updates to your current payroll system.
- Consider whether a private plan makes more sense. Employer-sponsored 401(k) and SIMPLE IRA plans offer more flexibility than state programs, including the option to match employee contributions — a meaningful recruiting and retention tool in a tight labor market.
ACCA continues to monitor workforce-related regulatory developments that affect contractors. Visit acca.com/advocacy for updates on the policy issues shaping your business.
Posted In: Compensation, HR, Money
