The Rosenbaum Law Firm P.C. Blog

New York has officially joined the list of states mandating retirement savings programs. The New York Secure Choice Savings Program is moving toward full implementation, and employers without a plan need to prepare.

What Is It?

Secure Choice is a state-run Roth IRA program funded through payroll deductions. Employees are automatically enrolled but can opt out. Employers don’t contribute, don’t pick investments, and don’t have fiduciary liability. Your role is limited to transmitting contributions.

Who’s Covered?

You’re in if you:

· Have 10+ employees in New York,

· Have been in business at least two years, and

· Don’t sponsor a retirement plan.

If you already have a 401(k), 403(b), SIMPLE, or SEP, you’ll need to certify your exemption.

Timeline

· Pilot phase – Underway now.

· Enrollment – Expected late 2025.

· Compliance window – Up to 9 months after launch.

What to Do Now

· Confirm if Secure Choice applies to you.

· Gather documents if you’re exempt.

· Make sure payroll can handle deductions.

· Organize employee data for onboarding.

· Communicate early—employees will have questions.

· Consider whether a private plan (401(k), PEP) is a better option.

Bottom Line

Secure Choice is coming, and it’s not optional. Compliance will be easy if you prepare now, but don’t wait until the state tells you you’re behind.

That 401(k) Conference is back on the road for 2026, and the lineup is shaping up nicely. After the Milwaukee stop fell through, we’re bringing the show to Wrigley Field in April. Chicago in the spring, five hours of 401(k) content, a ballpark lunch, a stadium tour, and a Major League great—it doesn’t get more Chicago than that (just bring a jacket, April at Wrigley is not for the faint of heart).

We’re also lining up:

· Colorado in May – thin air, but not thin content.

· Philadelphia in June – because nothing says fiduciary responsibility like a cheesesteak.

· Washington D.C. in September – if there’s enough support, we’ll make Congress jealous with a better retirement plan discussion than they’ve had in decades.

As always, this isn’t just a conference, it’s an experience. Every event gives you five hours of content, a stadium lunch, a tour of the park, and time with a baseball legend.

Sponsorships start at just $500—a small investment for serious exposure in front of plan providers, advisors, and industry pros. Attendance is $100 for the first attendee, and just $50 each for additional people from the same firm. Bring your whole crew, make a day of it, and walk away with more connections (and better stories) than you’ll ever get from a boring hotel ballroom conference.

This is my way of mixing business with baseball, and it’s worked for years. If you’re tired of stale coffee and windowless breakout rooms, join us at the ballpark instead.

I’ll keep everyone posted as dates lock in—but for now, pencil in Wrigley Field in April. It’s going to be a great season.

The Department of Labor has never been shy about changing its mind, and here we go again. In Advisory Opinion 2025-01A, the DOL rescinded its 2023 advisory opinion that had given some comfort to plan sponsors with racial equity vendor programs. Back then, the DOL had essentially said: if you want to factor in your corporate diversity initiatives when hiring asset managers, you could do that under ERISA without running afoul of your fiduciary duties.

That was then. This is now.

The 2023 Opinion: A Green Light That’s Now Red

The 2023 advisory opinion—which I covered in detail when it came out—looked at a very specific program where the plan sponsor (not the plan) would pick up the tab for some or all of the fees charged by diverse asset managers. In practice, this meant the fiduciaries could look at that subsidy as part of their decision-making process, potentially giving diverse managers an edge in being selected. The DOL said: fair enough. That arrangement, if prudently considered, was consistent with ERISA.

It wasn’t a sweeping blessing of DEI programs in the retirement plan space, but it was a crack in the door. It signaled that ERISA fiduciaries had some leeway to acknowledge the sponsor’s diversity goals without necessarily running afoul of the rules.

The 2025 Opinion: Not So Fast

Fast-forward two years. In Advisory Opinion 2025-01A, the DOL didn’t just reverse course—it tore the old opinion up and threw it out. The Department shifted its focus away from fiduciary analysis under ERISA and zeroed in on the legality of the program itself.

According to the new opinion, the vendor diversity initiative wasn’t just a questionable fiduciary exercise—it was flat-out illegal discrimination under federal civil rights law. That’s a bombshell. The DOL even directed the sponsor to “take immediate action to end all illegal activity” in the program and made it clear that ERISA offers no shield against civil rights violations.

What It Means for Plan Sponsors and Fiduciaries

The message is clear: you can’t hang your hat on the 2023 guidance anymore. It’s gone. If you have a racial equity or vendor diversity program, don’t assume ERISA gives you cover. The first question now isn’t “is this prudent under ERISA?”—it’s “is this legal under federal civil rights laws?”

That’s a threshold issue. If the program itself is unlawful, then there’s no point even talking about fiduciary prudence.

So what should plan sponsors do?

· Reevaluate existing programs. If you have vendor or supplier diversity initiatives tied to your retirement plan, now is the time for a hard look.

· Consult counsel. These issues sit at the intersection of ERISA and civil rights law. That’s not a place for guesswork.

· Don’t rely on outdated guidance. The 2023 opinion has no weight anymore.

My Take

This isn’t about politics—it’s about risk. Plan fiduciaries don’t get to pick and choose which federal laws to follow. If a diversity initiative crosses the line into illegal discrimination, the DOL has made it clear: ERISA won’t save you.

Whether you loved the 2023 opinion or hated it, the takeaway is the same—fiduciary decisions live and die by compliance. And if the underlying program is illegal, you’re already playing in a ballgame you can’t win.

Another excessive fee case is wrapping up, this time involving the $5.6 billion Northwell Health 403(b) Plan. After five years of motions, amendments, and appeals, the parties have agreed to a $2.75 million settlement.

The lawsuit, brought by plan participant Kaila Gonzalez back in 2020, accused Northwell and its plan fiduciaries of allowing excessive recordkeeping fees and hanging onto underperforming investments. While the case was dismissed at one point, it was revived in 2024 with claims centered on recordkeeping fees and the long-term underperformance of a Lazard Fund.

Now, instead of continuing costly litigation, the defendants have agreed to fund a settlement that will be distributed among more than 50,000 current and former participants, beneficiaries, and alternate payees. As usual, attorneys’ fees (expected at one-third of the settlement) and a modest award for the named plaintiff will come out of the total before distributions are made.

The key lesson here is that these cases take time, and they often turn on very specific claims about fees and performance. Even when fiduciaries win early dismissals, plaintiffs can regroup and come back with narrower arguments that survive. For plan sponsors, the takeaway hasn’t changed: monitor fees, benchmark regularly, and don’t let an underperforming fund linger too long. Litigation may drag on for years, but ignoring fiduciary best practices is what invites it in the first place.

One thing I’ve learned in the retirement plan business is that participant demand usually runs ahead of what plan sponsors and providers are willing to offer. The Schroders 2025 U.S. Retirement Survey drives that point home. Almost half of defined contribution plan participants—45%—say they would invest in private equity or private debt if they had the chance. That’s up nine points from last year.

What’s more telling is the behavior behind that interest. Three out of four participants who want access to private assets said they’d actually increase their contributions if the option were available. For sponsors who complain about low contribution rates, this is a rare opportunity: a new feature that could encourage employees to put away more money for retirement.

The Reality Gap

Even with the demand, participants aren’t exactly optimistic. Only 30% think their plan will add private assets in the next five years. Almost half have no idea, and nearly a quarter don’t expect to see them before 2030. That hesitation is classic 401(k) industry behavior—we drag our feet, we worry about liability, and then years later we finally adopt what pensions have been doing for decades.

Traditional pensions have always mixed public and private investments. But because 401(k) plans are participant-directed, sponsors and providers have been slow to embrace alternatives. They fear fees, complexity, and the challenge of explaining investments that most employees barely understand.

How Much Participants Would Allocate

Participants aren’t looking to gamble. The majority—51%—would put less than 10% of their retirement assets into private investments. Another 36% would set aside 10 to 15%. Only 6% would go higher than that. Most participants clearly see private assets as a supplement, not a replacement for traditional core funds.

The Risk Perception

The survey also highlighted a split in perception. Nearly eight in ten participants think private assets improve diversification, and about three-quarters believe they can deliver higher returns. Yet over half still think private markets are risky. And when it comes to knowledge, only 12% of participants consider themselves very knowledgeable. The rest fall into the “somewhat” or “not much” categories. That lack of understanding is a flashing warning sign. You can’t drop complex investments into a 401(k) plan without a strong education component.

What This Means Going Forward

Private assets in 401(k) plans are no longer a theoretical idea—they’re a matter of when, not if. Regulatory momentum is building, and plan participants are asking for it. The real challenge will be structuring access in a way that is both practical and compliant. That likely means vehicles

like CITs or private equity sleeves in target-date funds, rather than a standalone fund that participants can dump half their account into.

For plan sponsors, the message is clear. Employees want more than the standard lineup of index funds and bond funds. They want access to the kinds of investments that pensions have used for decades. But before sponsors consider jumping in, they need to prepare for the responsibility that comes with it. That means setting allocation limits, monitoring fees, and most importantly, providing education that explains what private assets are—and what they are not.

As I’ve said many times before, innovation in the retirement space is great, but it has to be handled with care. Private assets could boost diversification, increase engagement, and drive contribution growth. But without the right guardrails, what looks like progress could just as easily turn into liability.

One of the biggest problems I see when new clients hire me is that they never bothered to review the provider contracts they signed years ago. It’s human nature — you’re excited to get the plan up and running, the provider drops a thick contract in front of you, and you assume it’s boilerplate. Fast forward a few years, and suddenly you’re staring down surrender charges or termination fees you never saw coming.

I’ve seen it happen more than once. A plan sponsor comes to me ready to fire their bundled provider after years of lousy service, only to discover a 7% surrender charge because they broke a seven-year contract. That’s not just a nasty surprise — that’s a financial gut punch that could have been avoided.

The fix isn’t complicated. Before you sign anything, have counsel review the agreement. Spending a few hundred bucks on legal fees today is nothing compared to the thousands (sometimes tens of thousands) you’ll pay later if you get hit with surrender charges. The math is simple: an ounce of prevention is worth a pound of cure.

So here’s the lesson: don’t let your plan’s future be dictated by fine print you never bothered to read. Contracts are written to protect the provider, not you. Make sure someone who knows what to look for reads it first. It’s the cheapest insurance you’ll ever buy.

I’ll admit it—I loved Cracker Barrel. Living in New York, I never had one nearby, so whenever I traveled, I made it a point to stop. In 2014, I was in Florida and ended up at three different Cracker Barrel locations in just two days. That’s how much I enjoyed it. The food wasn’t fancy, but it was consistent. I could count on a Reuben sandwich or Eggs in the Basket and know exactly what I was getting.

Now? Not so much.

Every time I found something on their menu I liked, they’d remove it. Vacations for me are rare, and the idea that the simple joy of a Cracker Barrel Reuben would vanish felt like a betrayal. Over the past six years, their sales have fallen off a cliff. Their response? They’ve “modernized” the restaurants, stripped away some of the kitschy charm that made them unique, and—because every struggling company loves to do it—they changed the logo.

Here’s the thing: the logo isn’t the problem.

What Cracker Barrel hasn’t done is tackle the one thing that drove customers away—the menu. The food feels bland and uninspired, like Applebee’s in a rocking chair. By chasing modernization without fixing the core, they’ve left themselves vulnerable. Worse, their logo change ended up being used as a political lightning rod, and suddenly the conversation isn’t about the food at all. It’s about cultural debates no one asked Cracker Barrel to join.

That’s the lesson here. When you’re struggling, focus on the substance. If you’re a retirement plan provider, your “menu” is your service. If participants are frustrated because payroll isn’t processed on time or plan documents aren’t updated, a shiny new logo isn’t going to save you. Your clients don’t care if you have a new website or a rebranded tagline; they care about whether you can deliver.

Cracker Barrel forgot what made people like me drive out of my way for a plate of eggs. Plan providers can’t afford to make the same mistake. Fix what’s broken. Don’t waste time on what isn’t.

When I look back on my brief tenure at that union law firm, the irony wasn’t lost on me. We were representing labor, but as associates, we were treated so poorly that the running joke was that we ought to unionize ourselves. That early experience cemented my view on employer–employee relations: no employer ever thinks they’re underpaying, and no employee ever thinks they’re overpaid. That tension is the permanent fault line in every workplace.

I never once thought I was overpaid in my career. Quite the opposite. When I was the head attorney at a TPA, I knew full well the guy I replaced was pulling in about three times my salary. That didn’t sit well with me, especially when the paralegal was let go after the GUST restatements. Suddenly, all that work fell in my lap. No extra help, no extra pay. I joked with colleagues that when I eventually left, they’d need two attorneys to do my work. Turns out, I was being generous—after I walked, they had to hire three.

And that’s the moral here. Employers sometimes think they’re saving money by squeezing more out of a good employee without compensating them. In reality, they’re writing their own pink slip. You can’t keep piling on work without recognition or reward and expect loyalty. Eventually, that employee will find a better situation, and the company will be left scrambling—often spending far more than the “extra” $25,000 it would’ve taken to keep that person happy in the first place.

In the retirement plan business, good employees are gold. They’re not easy to find, they’re not easy to train, and when you lose one, it costs you in time, money, and client confidence. If you’ve got someone who’s doing the work of two or three people, you’ve got two choices: pay them fairly now, or pay dearly later. It really is that simple.

The Department of Labor’s Employee Benefits Security Administration (EBSA) tried to play cleanup with the rulebook and instead found out that sometimes the “old” rules are still needed. After floating the idea of removing certain safe harbors — including guidance on selecting annuity providers and the definition of plan assets — EBSA has now backed off after receiving significant adverse comments.

The Attempt to Simplify

Back on July 1, EBSA published a direct final rule to wipe away a 2008 regulation that offered fiduciary safe harbor protections for selecting annuity providers for 401(k) benefit distributions. The thinking was that this rule had become redundant. After all, Congress already amended ERISA in 2019 through the SECURE Act to create a new statutory safe harbor for the same activity.

The DOL reasoned that the old regulatory safe harbor might actually be more confusing than helpful — what they called a “trap for the unwary.” The message was clear: Why keep two rules on the books when one streamlined statute should do the job?

But as is often the case in the retirement plan space, what regulators think is unnecessary can be vital to practitioners.

Industry Pushback

The comment period produced significant objections. Groups like the U.S. Chamber of Commerce and the Insured Retirement Institute (IRI) argued that the old regulatory safe harbor still matters. Why? Because the 2008 regulation covers both the provider and the contract selection. The SECURE Act’s safe harbor, by contrast, is narrower — it only applies to selecting the insurer.

As Robert Richter from the American Retirement Association pointed out, the SECURE Act safe harbor “isn’t as broad in scope as the regulatory safe harbor.” In other words, removing the old rule would have stripped fiduciaries of a wider protective umbrella.

The IRI put it bluntly: the regulatory safe harbor doesn’t conflict with the statutory one — it complements it. Together, they give plan fiduciaries more confidence when navigating annuity distribution options, an area already fraught with complexity and second-guessing.

Plan Assets and General Accounts

The other rule EBSA tried to toss concerned the definition of “plan assets” as it relates to insurance company general accounts. The DOL thought the guidance was outdated since it only applies to insurance contracts issued before 1999. Industry players said otherwise.

The Chamber of Commerce reminded the Department that many insurers and plan sponsors still rely on that safe harbor today. Some of those pre-1999 contracts are still in force and may be for years to come. Without the safe harbor, there could be real uncertainty over whether assets in an

insurer’s general account are ERISA plan assets — a classification that could trigger massive compliance headaches.

The Chamber’s point was simple: the regulation was designed with durability in mind. It’s not obsolete if people are still relying on it. And as long as those contracts exist, the safe harbor still serves a purpose.

Lessons Learned

What’s the takeaway? Regulators often want to streamline, simplify, and sweep away “old” rules. But in the retirement plan world, old rules have a way of sticking around for a reason. Plan fiduciaries crave certainty, not fewer pages in the Code of Federal Regulations.

The DOL may have thought it was clearing clutter, but in reality, it was removing tools that practitioners still need. The retirement plan system is already complex — stripping out guidance that has provided clarity for nearly two decades doesn’t make life easier. It just shifts the risk back onto plan sponsors and fiduciaries.

So EBSA blinked, and rightly so. The safe harbors live another day, and fiduciaries continue to have both belts and suspenders when it comes to annuity selection and insurance general account treatment.

And if you’ve been in this business long enough, you know one thing: in retirement plans, more protection is always better than less.

The retirement plan industry just hit another milestone, and it didn’t come from Wall Street or the big recordkeepers. State-run automatic IRAs have now passed $2 billion in assets, covering more than a million workers across 12 programs. That’s a staggering figure when you consider how new these programs are and how skeptical some of us were when they first launched.

To put it into perspective, it took six years for auto-IRAs to reach their first billion. The second billion came in just 18 months. That kind of acceleration shows momentum is here to stay.

Why It’s Growing

The growth is being fueled by three factors: market performance, more workers enrolling, and savers putting away higher amounts as programs mature. Once employees see balances accumulate, many increase contributions. That natural compounding, paired with automatic enrollment, explains why the numbers are climbing faster now than in the early years.

State Adoption Expands

Five new states—Delaware, Maine, New Jersey, Vermont, and Nevada—have rolled out programs in just the last two years. Each launch expands coverage to private-sector workers who otherwise wouldn’t have retirement savings access through their employers. Over 250,000 businesses are already registered with state programs, while tens of thousands of others, perhaps motivated by the mandates, have decided to implement their own 401(k)s or other qualified plans instead.

So whether or not a state program is the endgame, the net effect is the same: more workers have access to retirement savings.

Partnerships and Innovation

One of the more interesting developments is how states are beginning to partner to streamline operations. Colorado SecureSavings launched its “Partnership for a Dignified Retirement” to cut administrative costs and avoid each state reinventing the wheel. Maine, Delaware, and Vermont joined that partnership last year and have already built up more than $144 million in assets across 100,000 savers. Nevada and Minnesota are lining up to join next.

Other states are also speeding up their timelines. Rhode Island passed its legislation in 2024 and rolled out a pilot program in 2025. Connecticut’s MyCTSavings program, along with Rhode Island’s RISavers, demonstrates that with the right model, states can get these programs off the ground much faster than we once thought possible.

What’s Next

New York is in the middle of recruiting for its Secure Choice Savings Program and expects to launch later this year. Hawaii’s program is slated for 2026 or 2027, and Washington is planning for 2027. Ten additional states—including heavyweights like Massachusetts and Pennsylvania—are actively considering legislation.

The trend line is obvious: auto-IRAs are spreading, growing, and evolving. What started as a handful of pilot programs has turned into a national movement that’s reshaping how workers save for retirement.

My Take

For years, I’ve said the retirement industry can’t count on voluntary employer adoption alone to close the coverage gap. State-run auto-IRAs are proving the point. Whether you like them or not, they’re bringing millions of uncovered workers into the system. And for every employer that doesn’t want to participate in the state program, many are establishing their own 401(k) instead. That’s a win for coverage.

The lesson here? Sometimes government nudges work. And when it comes to retirement savings, the results speak louder than the critics ever did.