|NY City Hall Press Office Photo|
NEW YORK—Mayor Bill de Blasio, Council Member Ben Kallos, Council Member Miller, AARP and advocates rallied recently to make New York City first city in the nation to create a universal retirement savings program. Currently, about one and a half million private sector employees in New York City have no access to a retirement saving program through their employer.
“Over a million New Yorkers work their whole lives and have nothing to show for it,” said Mayor de Blasio. “Rather than work until the day they die, Universal Retirement Security will allow more New Yorkers to breathe a sigh of relief later in life and truly enjoy the years they’ve earned.”
“We want to level the playing field for all New Yorkers who work in New York City and contribute to its economy. Historically, low-income workers have been left out of many opportunities to save for their retirement. This legislation will change that to ensure greater parity for retirement savings accounts,” said Commissioner Jacques Jiha, New York City
Department of Finance.
Retirement security is a critical issue facing working New Yorkers. Most private sector workers in New York City do not have any access to a retirement savings program, including a disproportionate number of low-income, immigrant, minority, and female New Yorkers. In addition:
- Only 43 percent of working New Yorkers have access to a plan that can help them save for retirement. Those that do have access often face large fees, because they do not have the leverage provided by a collectively-pooled savings program.
- Even those who have started to save do not have much: 40 percent of New Yorkers between the ages of 50 and 64 have less than $10,000 saved for retirement.
The City’s proposal would enable New Yorkers in the private sector to automatically enroll in an employee-funded retirement plan.
- The plan would create an automatic-enrollment individual retirement account for employees at businesses that do not already have a program. Businesses that have a program could not drop their current plan to enroll in this one.
- Contributions would be exclusively from employees (rather than from employers or the City) and made through payroll. Contributions would be based on a default rate; employees would have the ability to change their rate or opt out of the program.
- Employees would be able to transfer the savings account from job to job.
- Consistent with ERISA eligibility, part-time workers who work at least 20 hours per week would be covered.
- In addition, the City would create a board to establish and oversee the management of the program, which will be launched by the end of 2021. The City would also undertake a robust outreach and education effort on the program.
- Through this program, an employee who makes $50,850 per year (the median wage for a job in New York City) and invests 5% annually while earning a conservative average net return of 4% would have saved $146,274 after 30 years.
Retirement Security for All is a continuation of the de Blasio Administration’s commitment to workers’ rights, including Paid Safe and Sick Leave, Fair Workweek, fighting for a $15 minimum wage and Paid Personal Time.