Mayor Bill de Blasio, Council Member Ben Kallos, Council Member Miller, AARP and advocates rallied today 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.
“With this retirement plan the City will take another step to strengthen the safety net for New Yorkers by ensuring that virtually all workers have the opportunity to save for retirement through their paycheck. This innovative program will make NYC the first city in the country to provide this benefit to businesses and their employees. This plan will give hope to workers whose retirement plan is now ‘work ‘til I die.’” said John Adler, Director of Mayor’s Office of Pensions and Investments and Chief Pension Investment Advisor.
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.
“Retiring solely on Social Security is, unfortunately, the only option for many older New Yorkers today. Providing more trusted retirement accounts for all better prepares New Yorkers to age-in-place and face rising housing and medical costs. Remember, everyone is aging! Let’s be prepared with more trusted Retirement accounts,” said Department for the Aging Commissioner Lorraine Cortés-Vázquez.
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The City’s public employees have had access to deferred compensation options since 1986. This is an opportunity to have 1.5 million New Yorkers access to these vital programs, to ensure security and stability in their senior years,” said Commissioner Renee Campion, Mayor’s Office of Labor Relations.
“New York City is already home to more than 1.5 million older adults and seniors are now retiring in greater numbers,” said DCWP Commissioner Lorelei Salas. “But sadly more than half of households over 55 years old don’t have any retirement savings. Saving for retirement is key to financial security as you get older and the sooner you start, the better. With this retirement savings program, hundreds of thousands of workers will now be able to easily set aside money for their futures. I encourage everyone to make a plan and start saving today.”
“As we work to increase the employment rate of New Yorkers with disabilities, this means also ensuring that they have savings when they retire,” said Mayor’s Office for People with Disabilities Commissioner Victor Calise. “We look forward to continuing to work with the City Council on this and other initiatives to increase access to employment and financial empowerment resources for New Yorkers with disabilities.”
“The American people deserve peace of mind and to know their hard earned benefits will be available when they need them. Sadly, too many New Yorkers suffer from retirement insecurity. I’m thankful that the City has introduced a plan to curb this problem and help more New Yorkers retire with dignity,” said Congresswoman Carolyn Maloney.
“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. I applaud Mayor de Blasio for moving this measure forward,” said Congresswoman Nydia M. Velázquez.
“I applaud the announcement of Mayor Bill de Blasio and his administration to create new and innovative paths for retirement savings. Making sure that each and every New Yorker possesses access and a pathway to building long term wealth through common sense saving practices, not only helps families build a foundation for themselves, it provides stability for our entire economy. I look forward to working with the Mayor on this and other initiatives to increase economic opportunity for all Americans,” said Congressman Gregory Meeks.
“There are far too many New Yorkers who are not able to save for retirement. They need more options to help them put aside money today so they have a secure and dignified retirement in the future,” said New York State Comptroller Thomas P. DiNapoli. “The plan of Mayor de Blasio and members of the City Council to increase access to IRAs for working New Yorkers seeks to pay dividends down the road for many.”
“All New Yorkers deserve a chance to prepare for their own retirement without fear of financial insecurity, poverty, hunger or homelessness. I applaud Mayor de Blasio and the City Council for working together to establish a universal retirement system in New York City,” said Assembly Member Richard N. Gottfried.
“3.5 million private-sector employees in New York State continue to work in companies that do not offer any retirement savings plans. Millions of families carry the burden of an insecure financial future and, to combat this, I introduced legislation to create the Secure Choice Savings Program that would offer the State’s IRA retirement plan to all working New Yorkers. With its passage in the FY 2018 Executive Budget, my focus is to now make the program employer-mandated. I applaud the City’s own efforts to expand retirement savings to all New Yorkers, and I hope, together, we can secure its implementation faster,” said Assembly Member Robert Rodriguez.
“Fulfilling the goal of retirement is fast becoming a lost tradition in America,” said Council Member I. Daneek Miller, Chair of the Committee on Civil Service and Labor. “People are working desperately to keep pace with ever increasing living costs, but lack the means or direction to avoid falling into poverty in their later years. Our legislation will help more than half of the working New Yorkers who are currently without a savings plan set aside a portion of their earnings so they can lay a foundation for a stable future, and particularly benefit communities of color who saw their average household wealth plummet for over three decades. I thank Mayor de Blasio for embracing this bold proposal. Council Member Kallos and I look forward to working with him and fellow advocates to make Retirement Security for All New Yorkers a reality.”
“Every New Yorker should be able to save for retirement. It’s hard to imagine that Republicans are all of a sudden against Americans taking ‘personal responsibility’ but stopping retirement savings for all was at the top of the Trump administration’s list in 2017 and even passed the Republican Congress,” said Council Member Ben Kallos. “Thank you to Mayor Bill de Blasio for his leadership and support for this bold step to help millions of New Yorkers save for retirement. I can’t wait to help millions of New Yorkers save for retirement and upset the Trump agenda all at the same time.”
“Access to retirement is a vital component to providing economic security but many people lack the means to adequately prepare,” said Council Member Adrienne Adams. “Creating the infrastructure for New Yorkers to save for retirement and prepare for the future is critical. I thank Mayor de Blasio and my Council colleagues for their support on this important issue. Countless New Yorkers will benefit from making retirement security a reality.”
“This plan will bring a greater degree of financial security to thousands of working people in our city,” said Council Member Daniel Dromm. “For many New Yorkers, retirement is simply out of reach. Housing and medical costs can be overwhelming, and make saving for the future very challenging. By providing workers with an IRA, this effort financially empowers New Yorkers and makes retirement a reality for them. I am pleased to stand with Mayor de Blasio, Council Member Miller, Council Member Kallos and the many advocates in support of this worthy initiative.”
“As Chair of the Committee on Women & Gender Equity, I recently led a hearing which investigated the tragedy of the large and growing number of older women aging into poverty. This is unacceptable, especially in the largest city in the wealthiest country in the world. I commend and wholeheartedly support the Mayor and my colleagues’ plan to give all working New Yorkers the opportunity to open a retirement account. It’s a profoundly important step toward ensuring that every New Yorker is able to age with dignity and security,” said Council Member Helen Rosenthal.
“Private sector employees need retirement security. This is an opportunity for the public and private sectors to work together to improve the future for our neighbors and fellow New Yorkers,” said Michael Mulgrew, President of the United Federation of Teachers.
“Access to retirement with dignity is a vital component of providing economic security for working families in New York City. By creating legislation that would require most private-sector employers to provide IRAs for their employees, Mayor de Blasio has once again shown that he is committed to supporting and fighting for working people, close to 60 percent of whom do not have access to employer-provided retirement accounts in New York City. We are proud to stand with the Mayor and support his bold initiative,” said Peter Ward, President of New York Hotel Trades Council.
““On behalf of the three-quarters of a million AARP members here in New York City, their family friends and neighbors, AARP is proud to stand with Mayor Bill de Blasio and Council Members Kallos and Miller in advocating for legislation to make a retirement savings program available to 1.5 million New Yorkers who have none now. This is an historic first-in-the-nation city program that will help achieve retirement security for New Yorkers,” said Beth Finkel, AARP New York State Director.
“For many hardworking New Yorkers, the ability to plan ahead and save for retirement is often out of reach for many reasons – lack of access to a retirement account should not be one of them. Access to an employee-funded retirement account will provide more than half of all working New Yorkers the opportunity to plan, save and enjoy the fruits of their labor later in life,” said José Calderón, President, Hispanic Federation.
“LiveOn NY applauds Mayor de Blasio (pictured above) and the City Council for continuing to push forward in establishing a retirement savings plan for New Yorkers,” said Allison Nickerson, Executive Director at LiveOn NY. “We are proud to support policies that aim to advance economic security as we age and that work to address the significant inequities that exist in our society. LiveOn NY looks forward to a day when all New Yorkers are able to age with the savings needed to thrive and experience all that New York has to offer.”
“Too many working New Yorkers face the prospect of getting older with no retirement savings — rather than retiring with the respect and dignity that they deserve. I applaud Mayor de Blasio, Council Members Millers and Kallos for taking this crucial issue head on, creating a new kind of private sector ‘minimum pension,’ analogous to the minimum wage, that will set a floor for retirement security and ensure that more workers can enjoy a decent, dignified retirement. And critically, this program is an important step towards re-establishing the idea that every working person deserves a decent pension,” said Bob Master, Assistant to the Vice President at Communications Workers of America, District 1.
“The National Conference on Public Employee Retirement Systems (NCPERS) applauds Council Members Miller and Kallos, Mayor de Blasio, and all New York City officials for their leadership in proposing a New York City based retirement savings initiative. NCPERS welcomes all policymakers and proposals that further retirement security for working Americans,” said Hank Kim, Esq., executive director and counsel of NCPERS. “This initiative proposal places New York at the vanguard of the many cities, counties, and states that are working to secure a brighter retirement for their citizens.”
“Our nation is facing a looming crisis because 68 million Americans lack access to retirement savings plans at work,” said Mel Aaronson, immediate past president of NCPERS. “The decision by New York’s elected leaders to pursue legislation to enhance retirement security for its citizens comes after a long period of reflection and study, and brings hope of a stable future to more New Yorkers.”
“The National Employment Law Project supports this legislation for many reasons. It creates an easy avenue to help workers who are currently not participating to have some meaningful involvement in developing a retirement nest egg, it will improve workers’ confidence in the system and their ability to invest, and it will begin to help level the playing field between those who are currently benefiting from retirement incentives and those who are not,” said Michele Evermore, senior policy analyst, National Employment Law Project.
“National policies to encourage workers to save for retirement tilt heavily toward the well-off and do little for low- and moderate-income workers. This City legislation is a sensible, cost-effective and long-overdue measure to help lower-income workers who are predominantly of color save for retirement. It is the least the City can do considering that it has long followed the national tax system in allowing an income tax exclusion for retirement savings that heavily favors high-income earners,” said James Parrott, Director of Economic and Fiscal Policies, Center for New York City Affairs at The New School.
“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 and Council Members Miller and Kallos 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.
“More than 100,000 construction workers—almost 75 percent of all private sector construction workers—do not have access to a workplace retirement plan,” said James Whelan, President of The Real Estate Board of New York. “I want to thank Mayor de Blasio and the City Council for proposing an individual retirement account program for private sector workers. Allowing workers the convenience of saving through automatic payroll deductions and enabling employees to bring accounts with them if they leave for other jobs are two common sense features of this proposal that will encourage New Yorkers to make smart decisions about retirement planning.”
“The ‘RetireWith Dignity’ proposal sets in motion a security needed after years of hard work and labor. Saving up front means less worries as New Yorkers age and prepare to retire. We need this security for current and future NYC employees,” said Dr. Kathlyn Barrett-Layne PhD, Staten Island Council of Churches.
“With so many hardworking New Yorkers nearing retirement age with insufficient resources for retirement and with so many more workers with little to no personal savings, the Mayor and the City Council are showing visionary and impactful leadership with the launch of these proposed individual retirement accounts” said Frederick A. Davie, M.Div., Executive Vice-President, Union Theological Seminary in the City of New York.
“King Solomon reveals that ants, while small are extremely wise, as they store up their food in the summer to survive the winter (Proverbs 30:24-25). The Micah Institute supports Mayor Bill de Blasio’s proposal to provide access to Individual Retirement Accounts (IRAs) for all working New Yorkers,” said Rev. Dr. Peter Goodwin Heltzel, Micah Institute, Associate Professor of Theology New York Theological Seminary.
“Mayor Bill de Blasio is a true champion of the working class, and should be celebrated for this great initiative. This is a step in the right direction to ensure that all New Yorkers live their days with dignity. The members of our community at large and our church community, who toil on a daily basis in low income jobs and part time positions, can rest assured that they will be able to retire with financial security,” said Pastor James Richmond, Seventh-day Adventist Church.
“NYC has been on the forefront of equality standards for every working New Yorker. Under this administration, this is the first time for quite a while that an average employee is being looked after and is given a better ground to secure his or her retirement plan. The proposed retirement program legislation will be a step in the right direction to creating a more fair city, because millions of workers, especially those not in high powered jobs, will can be more confident about the work they do, knowing that they are getting an opportunity to invest in themselves and to provide a more secure future for themselves and their families,” said Harpreet Singh Toor, Chairman of Public Policy and External Affairs at the Sikh Cultural Society.
“Having enough money to retire is a profound concern for our city’s LGBT elders. A staggering 42% of older LGBT people fear they will outlive the money they have saved for retirement, as compared to 25% of non-LGBT older people. SAGE applauds Mayor De Blasio’s ‘Retirement Security for All’ plan as an important step in the right direction that will help ensure that older New Yorkers can retire with the financial security they need and deserve,” said Lynn Faria, Executive Vice President of SAGE.
“Advent Capital Management has always provided retirement benefits to our employees, and I applaud this plan by the Mayor and the City Council to make sure that all employees of NYC businesses have access to a workplace plan to provide for their own retirement,” said Tracy V. Maitland, President and Chief Investment Officer, Advent Capital Management.
“The sponsors of this bill follow in the footsteps of FDR. Thanks to them 1.5 million New Yorkers will have a better retirement,” said Hon. Joshua Gotbaum, Chair, Maryland Small Business Retirement Savings Program.