Mayor Bill de Blasio and Public Advocate Letitia James yesterday hailed the U.S. Department Of Labor’s (DOL) loosening of regulations that would make it easier for local municipalities to establish a pension fund for private sector workers.
James first floated the idea in Feb.2015, when she along with City Council Members Daneek Miller, Rory Lancman, and Ben Kallos introduced legislation calling for a study to create such a government entity afters studies found that most New Yorkers are unprepared for retirement with 60% of private sector workers in the city without access to a pension or 401(k).
Then in February of this year, de Blasio, James and City Council Speaker Melissa Mark-Viverito said they are working on submitting legislation before the City Council that would see the City be the first in the nation to oversee and administrate a retirement savings program for city residents that are employees in the private sector.
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 also submitted comments to the DOL in support of a federal rule change that would ensure cities could create retirement savings programs without liability or burdensome requirements.
That rule change came yesterday when the DOL proposed a change whereupon a city can create its own retirement savings program provided it has the authority under state law, its population is equal to or greater than the population of the least populous state, and the state does not have its own retirement savings program.
“Today, the United States Department of Labor’s proposed regulation expands the “safe harbor” to certain cities, which is an important preliminary step. We will continue to engage with the DOL, as we have in recent months, to ensure that the requirements set forth in the final regulation enable the City to move forward with a workable retirement savings program that promotes the success of families and in turn, the success of our city,” said de Blasio.
“Just 43% of working New Yorkers have access to a retirement savings plan, with low-income, immigrant, minority and female New Yorkers disproportionately affected. Successful implementation of the City’s plan will help right this wrong and set people up on a path to succeed long after they’ve stopped working,” he added.
James said regardless of occupation, every New Yorker deserves access to all the benefits associated with a retirement savings plan, but less than half of city workers have them.
“I applaud the Department of Labor for proposing legislation that would expand the rights of cities to create retirement savings plans, allowing many New Yorkers to take advantage of the City-sponsored plan that Mayor de Blasio and I introduced in February. With more than half of our workers projected to be in poverty or near poverty once they retire, too many hardworking individuals are not ready for the end of their careers,” said James.
“We all deserve to live our golden years in dignity and because of this new policy, millions of New Yorkers will finally have a future they can look forward to,” James added.
