S T A T E O F N E W Y O R K
2023-2024 Regular Sessions
I N S E N A T E
January 20, 2023
Introduced by Sens. GOUNARDES, HARCKHAM, JACKSON, SEPULVEDA -- read
twice and ordered printed, and when printed to be committed to the
Committee on Consumer Protection
AN ACT to amend the general business law, in relation to the secure
choice savings program and participating individuals
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 1300 of the general business law, as added by
section 2 of part X of chapter 55 of the laws of 2018 and subdivisions 4
and 8 as amended by chapter 452 of the laws of 2021, is amended to read
§ 1300. Definitions. All terms shall have the same meaning as when
used in a comparable context in the Internal Revenue Code. As used in
this article, the following terms shall have the following meanings:
1. "Board" shall mean the New York secure choice savings program board
established under this article.
2. "Superintendent" shall mean the superintendent of the department of
2-a. "Commissioner" shall mean the commissioner of taxation and
2-b. "Comptroller" shall mean the comptroller of the state.
3. "Employee" shall mean any individual who is eighteen years of age
or older, who is employed by an employer, and who earned wages working
for an employer in New York state during a calendar year.
4. "Employer" shall mean a person or entity engaged in a business,
industry, profession, trade, or other enterprise in New York state,
whether for profit or not for profit, that (i) has at all times during
the previous calendar year employed at least ten employees in the state,
(ii) has been in business at least two years, and (iii) has not offered
a qualified retirement plan, including, but not limited to, a plan qual-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
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ified under sections 401(a), 401(k), 403(a), 403(b), 408(k), 408(p) or
457(b) of the Internal Revenue Code of 1986 in the preceding two years.
5. "Enrollee" shall mean any employee OR PARTICIPATING INDIVIDUAL who
is enrolled in the program.
6. "Internal Revenue Code" shall mean the Internal Revenue Code of
1986, or any successor law, in effect for the calendar year.
7. "IRA" shall mean a Roth IRA (individual retirement account).
8. "Participating employer" shall mean an employer that facilitates
access to the program's payroll deduction IRA as provided for by this
article for its employees who are enrollees in the program.
9. "PARTICIPATING INDIVIDUAL" MEANS ANY INDIVIDUAL WHO IS EIGHTEEN
YEARS OF AGE OR OLDER AND HAS NEW YORK TAXABLE INCOME AS DEFINED IN
SECTION SIX HUNDRED ELEVEN OF THE TAX LAW WITHIN A CALENDAR YEAR, WHO
ENROLLS IN THE PROGRAM INDEPENDENT OF AN EMPLOYMENT RELATIONSHIP WITH AN
ELIGIBLE EMPLOYER, MAINTAINS AN ACCOUNT IN THE PROGRAM, AND IS NOT A
10. "Payroll deduction IRA" shall mean an arrangement by which a
participating employer facilitates access for [enrollees] EMPLOYEES to
remit payroll deduction contributions to the program.
[10.] 11. "Program" shall mean the New York state secure choice
[11.] 12. "Wages" means any compensation within the meaning of section
219(f)(1) of the Internal Revenue Code that is received by an enrollee
from a participating employer OR BY A PARTICIPATING INDIVIDUAL during
the calendar year.
§ 2. Section 1301 of the general business law, as amended by chapter
452 of the laws of 2021, is amended to read as follows:
§ 1301. Program established. There is hereby established a retirement
savings program in the form of an automatic enrollment payroll deduction
IRA FOR PRIVATE-SECTOR EMPLOYEES AND A RETIREMENT SAVINGS PROGRAM IN THE
FORM OF A PERSONAL IRA AS ESTABLISHED BY THE BOARD FOR PARTICIPATING
INDIVIDUALS, known as the New York state secure choice savings program.
The general administration and responsibility for the proper operation
of the program shall be administered by the board for the purpose of
promoting greater retirement savings for private-sector employees AND
PARTICIPATING INDIVIDUALS in a convenient, low-cost, and portable
manner. The board may delegate such authority and responsibility for the
development and implementation of the program to the department of taxa-
tion and finance as the board deems proper.
§ 3. Section 1303 of the general business law, as added by section 2
of part X of chapter 55 of the laws of 2018, is amended to read as
§ 1303. Fiduciary duty. The board, the individual members of the
board, the trustees, any other agents appointed or engaged by the board,
and all persons serving as program staff shall discharge their duties
with respect to the program solely in the interest of the program's
enrollees and beneficiaries as follows:
1. for the exclusive purposes of providing benefits to enrollees and
beneficiaries and defraying reasonable expenses of administering the
2. by investing with the care, skill, prudence, and diligence under
the prevailing circumstances that a prudent person acting in a like
capacity and familiar with those matters would use in the conduct of an
enterprise of a like character and with like aims; and
3. by using any contributions paid by PARTICIPATING INDIVIDUALS,
employees, and employers remitting employees' own contributions into the
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fund exclusively for the purpose of paying benefits to the enrollees of
the program, for the cost of administration of the program, and for
investments made for the benefit of the program.
§ 4. Section 1304 of the general business law, as added by section 2
of part X of chapter 55 of the laws of 2018 and subdivisions 7 and 9 as
amended by chapter 452 of the laws of 2021, is amended to read as
§ 1304. Duties of the board. In addition to the other duties and
responsibilities stated in this article, the board shall, itself or
through the use of appropriate financial organizations as managers:
1. Cause the program to be designed, established and operated in a
(a) accords with best practices for retirement savings vehicles;
(b) maximizes participation, savings, and sound investment practices
including considering the use of automatic enrollment as allowed under
(c) maximizes simplicity, including ease of administration for partic-
ipating employers and enrollees;
(d) provides an efficient product to enrollees by pooling investment
(e) ensures the portability of benefits; and
(f) provides for the deaccumulation of enrollee assets in a manner
that provides a financial benefit in retirement.
2. Explore and establish or authorize investment options, subject to
this article, that offer enrollees returns on contributions and the
conversion of individual retirement savings account balances to secure
retirement income without incurring debt or liabilities to the state.
3. Establish or authorize the process by which interest, investment
earnings, and investment losses are allocated to individual program
accounts on a pro rata basis and are computed at the interest rate on
the balance of an individual's account.
4. Make and enter into contracts necessary for the administration of
the program and fund, including, but not limited to, retaining and
contracting with investment managers, financial organizations, other
financial and service providers, consultants, actuaries, counsel, audi-
tors, third-party administrators, and other professionals as necessary.
5. Conduct a periodic review of the performance of any financial
organizations, including, but not limited to, a review of returns, fees,
and customer service. A copy of reviews shall be posted to the program's
6. Cause moneys in the program to be held and invested as pooled
investments or otherwise, with a view to achieving cost savings through
efficiencies and economies of scale.
7. Evaluate and establish or authorize the process for:
(a) an [enrollee] EMPLOYEE to contribute a portion of his or her wages
to the program via payroll deduction; and
(b) the enrollment of participating employers in the program.
8. The board may contract with financial organizations and third-party
administrators with the capability to receive and process employee
information and contributions for payroll deduction IRA or similar
9. Evaluate and establish or authorize the process for enrollment
including the process by which an employee may opt not to participate in
the program, select a contribution level, select an investment option,
and terminate participation in the program.
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10. EVALUATE AND ESTABLISH OR AUTHORIZE THE PROCESS FOR THE PARTIC-
IPATION AND ENROLLMENT OF ANY PARTICIPATING INDIVIDUAL.
11. Evaluate, or cause to be evaluated, the need for, and procure as
needed, insurance against any and all loss in connection with the prop-
erty, assets, or activities of the program, and indemnify as needed each
member of the board from personal loss or liability resulting from a
member's action or inaction as a member of the board.
[11.] 12. Make provisions for the payment of administrative costs and
expenses for the creation, management, and operation of the program.
Subject to appropriation, the state may pay administrative costs associ-
ated with the creation and management of the program until sufficient
assets are available in the program for that purpose. Thereafter, all
administrative costs of the program, including repayment of any start-up
funds provided by the state, shall be paid only out of moneys on deposit
therein. However, private funds or federal funding received in order to
implement the program until it is self-sustaining shall not be repaid
unless those funds were offered contingent upon the promise of such
repayment. The board shall keep its annual administrative expenses as
low as possible.
[12.] 13. Allocate administrative fees to individual retirement
accounts in the program on a pro rata basis.
[13.] 14. Set or authorize minimum and maximum contribution levels in
accordance with limits established for IRAs by the Internal Revenue
[14.] 15. Facilitate education and outreach to employers and employ-
ees[.] AND FACILITATE THE DEVELOPMENT OF EDUCATIONAL MATERIALS FOR
[15.] 16. Facilitate compliance by the program with all applicable
requirements for the program under the Internal Revenue Code, including
tax qualification requirements or any other applicable legal, financial
reporting and accounting requirements.
[16.] 17. Carry out the duties and obligations of the program in an
effective, efficient, and low-cost manner.
[17.] 18. Exercise any and all other powers reasonably necessary for
the effectuation of the purposes, objectives, and provisions of this
[18.] 19. Determine or authorize withdrawal provisions, such as
economic hardships, portability and leakage.
[19.] 20. Determine [employee] ENROLLEE rights and enforcement of
[20.] 21. Delegate such authority and responsibility for the develop-
ment and implementation of the program to the department of taxation and
finance as the board deems proper.
§ 5. Section 1309 of the general business law, as added by section 2
of part X of chapter 55 of the laws of 2018 and subdivisions 3, 4 and 5
as amended by chapter 452 of the laws of 2021, is amended to read as
§ 1309. Employer and employee AND PARTICIPATING INDIVIDUAL informa-
tional materials and disclosure forms. 1. Prior to the opening of the
program for enrollment FOR EMPLOYEES, the board shall design and dissem-
inate, or cause to be designed and disseminated, to all employers
employer informational materials and employee informational materials,
which shall include background information on the program, and necessary
disclosures as required by law for employees.
2. PRIOR TO THE OPENING OF THE PROGRAM FOR ENROLLMENT FOR PARTICIPAT-
ING INDIVIDUALS, THE BOARD SHALL DESIGN AND MAKE PUBLICLY AVAILABLE
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INFORMATIONAL MATERIALS WHICH SHALL INCLUDE BACKGROUND INFORMATION ON
THE PROGRAM AND HOW TO PARTICIPATE AS A PARTICIPATING INDIVIDUAL,
INCLUDING BUT NOT LIMITED TO, INFORMATION ON THE BENEFITS AND RISKS
ASSOCIATED WITH MAKING CONTRIBUTIONS TO THE PROGRAM, THE PROCESS FOR
MAKING CONTRIBUTIONS, THE CONTRIBUTION LEVELS THEY MAY CONTRIBUTE, THE
PROCESS FOR WITHDRAWAL OF RETIREMENT SAVINGS, AND THE PROCESS FOR
3. The employee AND PARTICIPATING INDIVIDUAL informational materials
shall be made available in English, Spanish, Haitian Creole, Chinese,
Korean, Russian, Arabic, and any other language the board deems neces-
[3.] 4. The employee AND PARTICIPATING INDIVIDUAL informational mate-
rials shall include a disclosure form. The disclosure form shall
explain, but not be limited to, all of the following:
(a) the benefits and risks associated with making contributions to the
(b) the process for making contributions to the program;
(c) how to opt out of the program;
(d) the process by which an employee can participate in the program
with a level of employee contributions other than three percent;
(e) THE PROCESS BY WHICH AN INDIVIDUAL CAN PARTICIPATE IN THE PROGRAM
AS A PARTICIPATING INDIVIDUAL;
(F) that [they] EMPLOYEES are not required to participate or contrib-
ute more than three percent;
[(f)] (G) the process for withdrawal of retirement savings;
[(g)] (H) the process for selecting beneficiaries of their retirement
[(h)] (I) how to obtain additional information about the program;
[(i)] (J) that employees AND PARTICIPATING INDIVIDUALS seeking finan-
cial advice should contact financial advisors, that participating
employers are not in a position to provide financial advice, and that
participating employers are not liable for decisions employees make
pursuant to this article;
[(j)] (K) information on how to access any available financial litera-
[(k)] (L) that the program fund is not guaranteed by the state; and
[(l)] (M) that they can opt out after they have been enrolled.
[4.] 5. The employee informational materials shall also include a form
for an employee to note his or her decision to opt out of participation
in the program or elect to participate with a level of employee contrib-
utions other than three percent.
[5.] 6. Participating employers shall supply the employee informa-
tional materials to existing employees at least one month prior to the
participating employers' facilitation of access to the program. Partic-
ipating employers shall supply the employee informational materials to
new employees at the time of hiring and new employees may opt out of
participation in the program.
§ 6. Subdivision 2 of section 1310 of the general business law, as
amended by chapter 452 of the laws of 2021, is amended to read as
2. [Enrollees] EMPLOYEES shall have the ability to select a contrib-
ution level into the program. This level may be expressed as a percent-
age of wages or as a dollar amount up to the deductible amount for the
[enrollee's] EMPLOYEE'S taxable year under section 219(b)(1)(A) of the
Internal Revenue Code. [Enrollees] EMPLOYEES may change their contrib-
ution level at any time, subject to rules promulgated by the board. If
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an [enrollee] EMPLOYEE fails to select a contribution level using the
form described in this article, then he or she shall contribute three
percent of his or her wages to the program, provided that such contrib-
utions shall not cause the [enrollee's] EMPLOYEE'S total contributions
to IRAs for the year to exceed the deductible amount for the
[enrollee's] EMPLOYEE'S taxable year under section 219(b)(1)(A) of the
Internal Revenue Code. The deduction of contributions from an employee's
wages shall not begin until the thirtieth day after such employee has
been enrolled in the program.
§ 7. The general business law is amended by adding a new section
1310-a to read as follows:
§ 1310-A. PROGRAM IMPLEMENTATION AND ENROLLMENT. EXCEPT AS OTHERWISE
PROVIDED IN THIS ARTICLE, THE PROGRAM SHALL BE IMPLEMENTED, AND ENROLL-
MENT OF PARTICIPATING INDIVIDUALS SHALL BEGIN NO LATER THAN DECEMBER
THIRTY-FIRST, TWO THOUSAND TWENTY-FOUR. THE PROVISIONS OF THIS SECTION
SHALL BE IN FORCE AFTER THE BOARD OPENS THE PROGRAM FOR ENROLLMENT.
1. PARTICIPATING INDIVIDUALS SHALL HAVE THE ABILITY TO MAKE CONTRIB-
UTIONS INTO THE PROGRAM BY PERSONAL CONTRIBUTIONS FROM A BANK ACCOUNT OR
BY OTHER MEANS AS DETERMINED BY THE BOARD. THE PARTICIPATING INDIVIDUAL
SHALL BE ABLE TO SELECT THE FREQUENCY AND THE CONTRIBUTION LEVEL WHICH
MAY BE EXPRESSED AS A SET DOLLAR AMOUNT UP TO THE DEDUCTIBLE AMOUNT FOR
THE PARTICIPATING INDIVIDUAL'S TAXABLE YEAR UNDER SECTION 219(B)(1)(A)
OF THE INTERNAL REVENUE CODE SUBJECT TO RULES PROMULGATED BY THE BOARD.
PARTICIPATING INDIVIDUALS MAY CHANGE THEIR CONTRIBUTION LEVEL AT ANY
TIME, SUBJECT TO RULES PROMULGATED BY THE BOARD.
2. PARTICIPATING INDIVIDUALS MAY SELECT AN INVESTMENT OPTION OFFERED
UNDER THE PROGRAM. PARTICIPATING INDIVIDUALS MAY CHANGE THEIR INVESTMENT
OPTION AT ANY TIME, SUBJECT TO RULES PROMULGATED BY THE BOARD. IN THE
EVENT THAT A PARTICIPATING INDIVIDUAL FAILS TO SELECT AN INVESTMENT
OPTION, THAT PARTICIPATING INDIVIDUAL SHALL BE PLACED IN THE INVESTMENT
OPTION SELECTED OR AUTHORIZED BY THE BOARD AS THE DEFAULT UNDER THIS
3. A PARTICIPATING INDIVIDUAL MAY TERMINATE HIS OR HER ENROLLMENT IN
THE PROGRAM AT ANY TIME IN A MANNER PRESCRIBED BY THE BOARD.
4. THE BOARD SHALL ESTABLISH AND MAINTAIN OR AUTHORIZE THE ESTABLISH-
MENT AND MAINTENANCE OF A SECURE WEBSITE WHEREIN PARTICIPATING INDIVID-
UALS MAY LOG IN AND ACQUIRE INFORMATION REGARDING CONTRIBUTIONS AND
INVESTMENT INCOME ALLOCATED TO, WITHDRAWALS FROM, AND BALANCES IN THEIR
PROGRAM ACCOUNTS FOR THE REPORTING PERIOD. SUCH WEBSITE MUST ALSO
INCLUDE INFORMATION FOR THE PARTICIPATING INDIVIDUAL REGARDING OTHER
OPTIONS AVAILABLE TO THE INDIVIDUAL AND HOW THEY CAN TRANSFER THEIR
ACCOUNTS TO OTHER PROGRAMS SHOULD THEY WISH TO DO SO. SUCH WEBSITE MAY
INCLUDE ANY OTHER INFORMATION REGARDING THE PROGRAM AS THE BOARD MAY
§ 8. This act shall take effect immediately.