New York City Mayor Bill de Blasio, City Council Speaker Melissa Mark-Viverito, Public Advocate Letitia James, Comptroller Scott Stringer and a broad coalition of business, labor, and other leaders rallied in support of New York City’s push to become the first city in the country to create a retirement savings program for private sector employees on February 25.
Mayor de Blasio, who proposed the initiative in his State of Our City earlier this month, is working with the Council Speaker and Public Advocate to introduce legislation. The City has also submitted comments to the U.S. Department of Labor in support of a federal rule change that would ensure cities could create retirement savings programs without liability or burdensome requirements.
“It’s unacceptable that many working families – the backbone of our city – labor their whole lives only to be left with nothing when they retire,” a press release issued by the mayor’s office quoted Mayor Bill de Blasio as saying. “That’s why we’re working to become the first city in the country to provide a retirement savings plan for private sector workers, and we’re heartened by the broad coalition supporting us.”
“All New Yorkers should have access to resources that will help them better plan for their future and provide peace of mind,” the press release quoted Council Speaker Melissa Mark-Viverito as saying. “Savings Access NY will do just that, while reducing the arduous steps and costly fees involved in setting up a retirement account. I’d like to thank my colleagues on the Council for their leadership on legislation that will help all New Yorkers build toward greater security in retirement, as well as Public Advocate Letitia James and Mayor de Blasio for their support on this important issue.”
Most private sector workers in New York City do not have any access to a retirement savings program, disproportionately impacting low-income, immigrant, minority, and female New Yorkers:
- 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.
- To simply live at poverty level for a 15-year retirement, a New Yorker would need roughly $215,000 in savings.
The City’s proposal would enable any New Yorker working at a business with ten or more employees to automatically enroll in an employee-funded retirement plan.
- The plan would create an automatic-enrollment individual retirement account for employees at businesses of 10 employees or more 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.
- The City would create a board to establish and oversee the management of the program, which will be phased in over the next few years. The City will also undertake a robust outreach and education effort on the program.
The retirement savings proposal follows other initiatives aimed at lifting up working families, including paid sick and parental leave, living and minimum wages, and more.
“Without bold action on retirement security, more than half of working New Yorkers will be forced to retire on a food budget of $5 a day,” said Public Advocate Letitia James. “That’s why we are creating an infrastructure for New Yorkers to save for retirement and prepare for the future. Our legislation will ensure that a comfortable retirement is not simply a luxury for the already wealthy, but a reality for every individual in our City.”
“Almost 60 percent of private sector workers do not have access to a retirement savings plan, which leaves millions of City residents to face life-altering financial decisions in their later years,” said Comptroller Scott M. Stringer. “We have an obligation to find solutions to the retirement savings crisis, so that every New Yorker has a fair chance to make it in this City. Today’s proposal is an important step toward that goal, as is the ongoing work of our existing Retirement Security Study Group. I look forward to collaborating with Mayor de Blasio, Speaker Mark-Viverito, and Public Advocate James to craft a plan that works for all New York City families.”
“Helping Americans achieve and enjoy financial independence is central to AARP’s mission, and we applaud Mayor de Blasio for proposing that New York become the first city in the nation to ensure that private sector employees have the option to save for retirement through payroll deduction,” said Beth Finkel, State Director of AARP in New York State. “As fewer people have pensions or 401(k)s, AARP is urging our elected officials to fill the gap by passing laws to establish plans that are voluntary and carry no ongoing costs to taxpayers – but enormous potential benefit to all. Mayor de Blasio, Council Speaker Mark-Viverito, Comptroller Stringer and Public Advocate James are showing true leadership on this issue. People are 15 times more likely to save if they can do so through payroll deduction. AARP intends to work with our city leaders to make that option available, and to ensure that New Yorkers are informed about the choice they will have to take control of their own financial futures and put themselves in position to enjoy this great city for the rest of their lives.”
“One of the strategic initiatives for DFTA is to promote economic security for both current and future older New Yorkers. We must start planning today for the economic security of the seniors of tomorrow,” said Department for the Aging Commissioner Donna Corrado. “Nearly 1 in 5 New Yorkers over the age of 60 is living at or below the poverty level. The creation of a retirement savings program for private-sector employees will provide a pathway to a more economically secure future.”
“Retirement isn’t something aging New Yorkers should have to worry about. We need pensions for all so New Yorkers can retire in security,” said Council Member Ben Kallos. “Thank you to Mayor Bill de Blasio, Public Advocate Letitia James, Speaker Melissa Mark-Viverito, and Council Member I. Daneek Miller for their leadership and partnership in bringing retirement security to the private sector.”
“Our city’s working families need an equal shot at attaining retirement security. This initiative will strengthen our joint vision for a New York City where nobody has to retire in poverty. I look forward to working with the Administration and the Speaker to make this a reality,” said Council Member Julissa Ferreras, Chair of the Committee on Finance.
“For many women, immigrants and other low wage earning New Yorkers working their entire careers in the private sector, saving for retirement remains an unattainable and impossible goal,” said Congresswoman Yvette D. Clarke. “In order to maintain the most basic standard of living in an ever increasingly costly city, it is estimated that retirees would need at least two hundred thousand dollars in savings to survive over fifteen years. Once again New York City is leading the way as our nation’s first municipality to offer this important economic protection for our working families through a retirement savings program. As a longtime advocate for working families, and a member of the House Committee on Small Businesses, I recognize the critical importance of providing economic support and security to New Yorkers during and long after their careers. I applaud the leadership of Mayor De Blasio, City Council Speaker Mark-Viverito and Public Advocate James on this ground breaking policy and pledge to support their efforts on the federal level.”
“The business community supports the Mayor’s commitment to improve the retirement security of New Yorkers and we look forward to working with him to develop a local program that achieves that objective,” said Kathryn Wylde, President and CEO of the Partnership for New York City.
“Most New Yorkers know from the state of their own finances just how serious the retirement security crisis is. By taking the historic step of creating the first city-run retirement savings plan in the nation for private sector workers, Mayor de Blasio, Speaker Mark-Viverito and Public Advocate James are demonstrating tremendous vision and boldly tackling one of the most serious income inequality concerns we face. One of the best parts of this plan is that it’s a winner both for our workers and our businesses. By creating a new, vital benefit for our businesses that is easy, doesn’t require burdensome paperwork, and will cost them nothing, we’re making New York more competitive for attracting employees and getting them to stay here. Having spent years advocating for a government-run program like the one the de Blasio administration is putting forth, EffectiveNY is enormously gratified and pleased to see this tremendous progress toward providing all New Yorkers the means to retire with dignity,” said Bill Samuels, Founder, EffectiveNY.
“The retirement savings crisis will devastate this country if millions of retirees fall into poverty. I applaud Mayor de Blasio for leading the way on an important national issue that must be addressed,” said Hamilton (“Tony”) E. James, President and Chief Operating Officer of Blackstone.
“From raising wages to expanding paid sick leave and paid parental leave, New York City has become a national leader on issues that matter to working families over the past two years. Creating a retirement plan for private sector employees would be one more important step forward. This plan – the first of its kind for any American city – would give more New Yorkers the chance to save for retirement without paying unnecessary fees to Wall Street. We applaud Mayor de Blasio, Speaker Mark-Viverito, and Public Advocate James for their leadership on this proposal,” said Bill Lipton, State Director of New York Working Families Party.
“Providing private sector employees with access to a great savings plan is an extremely positive and forward-thinking initiative that will allow countless New Yorkers – particularly young, low-income, immigrant, minority, and female residents – to invest in their futures and take advantage of an incredible benefit enjoyed by public sector workers,” said Brooklyn Chamber of Commerce President Carlo Scissura. “New York is usually a trailblazing city, so it is no surprise that we are leading the way for the rest of the country on this issue. I want to thank Mayor Bill de Blasio, Council Speaker Melissa Mark-Viverito and Public Advocate Letitia James for spearheading this legislation, which will result in a brighter horizon for both businesses and employees alike.”