25 Organizations Urge Governor to Sign Bill Strengthening NY’s Retirement Savings Program
Legislation Would Ensure Stronger ‘Secure Choice’ Payroll Deduction Savings Program for Private Sector Workers Who Now Lack Workplace Savings Option
ALBANY, N.Y. – AARP New York and two dozen other organizations representing consumers, people of color, seniors, retirees and business developers sent a joint letter (reprinted in full below) to Governor Andrew Cuomo urging him to sign into law as soon as possible a bill to strengthen the State’s Secure Choice Savings Program.
The legislation would empower millions to begin saving by automatically enrolling in a portable, payroll-deduction Individual Retirement Account employees of any private-sector company or non-profit organization with at least 10 workers that doesn’t already offer a retirement savings option. Any employee could opt out.
“Too many New Yorkers lack access to retirement savings options through their place of employment and too many New Yorkers find themselves ill-prepared for retirement,” says the letter to the Governor. “We can do better in New York. Strengthening the Secure Choice Savings Program will empower more people to take charge of their financial future.
“Our organizations strongly believe that if you sign S.5395-A / A.3213-A into law you can make New York a better place for people to live and retire with independence and dignity by giving them access to an easy way to save for their future.”
The yet-to-be-implemented Secure Choice program could benefit about 2.5 million 18- to 64-year-old private sector employees, if the Governor signs the bill.
“AARP New York is pleased that organizations representing so many New Yorkers are joining us in urging Governor Cuomo to sign this legislation as soon as possible to ensure this stronger Secure Choice Savings Program is up and running and empowering more New Yorkers to save,” said AARP New York State Director Beth Finkel.
“Automatic enrollment would vastly increase participation,” added Finkel; while people are 15 times likelier to save if they’re able to through their workplace, they’re 20 times more likely to do so if they’re automatically enrolled.
In all, more than half New York’s private-sector workforce lack access to employer-offered savings options, with employees of color disproportionately impacted.
Many small businesses recognize that a workplace retirement savings option can attract and retain employees – but many can’t afford it. Secure Choice will solve that problem. And when AARP New York surveyed the owners of businesses with fewer than 100 employees, more than two thirds supported the idea behind Secure Choice.
“With Mayor Bill de Blasio having signed a version of this program into law for New York City recently, we urge Governor Cuomo to sign this legislation swiftly and begin putting a financially secure and independent retirement within reach for millions more New Yorkers statewide,” said Finkel.
AARP is the nation’s largest nonprofit, nonpartisan organization dedicated to empowering people 50 and older to choose how they live as they age. With a nationwide presence and nearly 38 million members, AARP strengthens communities and advocates for what matters most to families: health security, financial stability and personal fulfillment. AARP also produces the nation’s largest circulation publications: AARP The Magazine and AARP Bulletin. To learn more, visit www.aarp.org, www.aarp.org/espanol or follow @AARP, @AARPenEspanol and @AARPadvocates, @AliadosAdelante on social media.
July 28, 2021
Honorable Andrew M. Cuomo
Governor of New York State
Albany, New York 12224
RE: Strengthen the New York Secure Choice Savings Program S.5395-A (Savino) same as A.3213-A (Rodriguez)
Dear Governor Cuomo:
Thank you for your leadership during this challenging time. Our organizations respectfully request that you sign into law as soon as possible S.5395-A (Savino) same as A.3213-A (Rodriguez), which passed the Legislature with a bi-partisan vote.
You created the New York Secure Choice Savings Program in your 2018-19 state budget proposal. S.5395-A / A.3213-A would strengthen this program (which is set to be implemented next year) to make it consistent with successful programs in effect in California, Oregon, and Illinois, to name a few, by expanding coverage to more employers and employees.
Unfortunately, access to a retirement plan continues to differ substantially by race and ethnicity in New York. About 67 percent of Hispanic/Latino workers, about 60 percent of Asian American Pacific Islander workers, and about 52 percent of African American/Black workers lacked access to an employer-provided retirement program. New Yorkers of color accounted for about 47 percent (1,649,000) of the Roughly 3,507,000 employees without a workplace retirement plan. Our organizations believe the ground work you have laid in establishing this program, combined with these amendments from the Legislature, would ensure a strong program that will undoubtedly address these disparities.
California, Oregon, and Illinois—each implementing their own state-facilitated retirement savings program that automatically enrolls employees and requires eligible employer participation—have seen tremendous growth and success since inception. Georgetown University’s Center for Retirement Initiatives reports that in each state, participants contribute on average between $106 to $136 per month towards their retirement. Cumulatively, these states have recorded a 30.9 percent increase in total assets in the first quarter of 2021 alone. We believe that we can do this in New York State as well and can strive for even better results.
State-facilitated retirement programs are a cost-effective solution for business owners to offer access to a retirement savings option for their employees, without having to administer a burdensome, costly program on their own. In fact, a recent AARP survey showed two thirds of small businesses across New York, defined as those with up to 99 employees, support the idea behind Secure Choice.
It is equally critical that this program automatically enroll employees. With automatic enrollment, 90 percent of eligible employees participate in a workplace retirement savings program. Without it, the participation rate drops to 70 percent, mainly consisting of older employees and higher paid workers. Younger employees, women, people of color, and lower-paid workers are less likely to participate.
Too many New Yorkers lack access to retirement savings options through their place of employment and too many New Yorkers find themselves ill-prepared for retirement. We can do better in New York. Strengthening the Secure Choice Savings Program will empower more people to take charge of their financial future.
Our organizations strongly believe that if you sign S.5395-A / A.3213-A into law you can make New York a better place for people to live and retire with independence and dignity by giving them access to an easy way to save for their future.