Mayor Bill de Blasio, Public Advocate Letitia James and City Council Speaker Melissa Mark-Viverito are working on submitting legislation before the City Council that would create a City board to oversee and administrate a retirement savings program for employees in the private sector in New York City.
This would make New York the first city in the nation to have such a program.
Dubbed “Savings Access NY,” the program would include automatic enrollment into individual accounts for businesses with more than 10 employees—which would be subsequently transferrable to future jobs. A default rate would determine each individual’s contribution to their account based off of their payroll, giving them the ability to adjust their rate or drop the plan altogether.
As part of the proposed 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.
At post time, KCP is unaware how this proposed board will work in ensuring that private sector employee savings will remain in a locked box for the retiree, how the savings money will be invested, and who will be liable for possible bad investments.
“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,” said de Blasio. “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.”
High demand exists for such a retirement plan, as poverty levels have risen among those individuals who are already retired. According to James, more than half of all New Yorkers would have to live on a food budget of less than $5 a day without the existence of such a retirement savings plan, while Finkel adds that people are 15 times more likely to save for retirement through payroll deduction.
Among those backing the initiative are several Brooklyn congresswomen including Yvette D. Clarke and Nydia M. Velázquez.
“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,” commented Clarke.
Velázquez added that, “Access to a secure retirement is an important social justice issue and, currently, too many New Yorkers do not have an affordable vehicle to put aside resources for the future. This proposal will help empower many working families employed by the private sector to achieve retirement security.”
