AARP: Gov. Hochul Signs New Law to Empower 2.5 M Working NYers to Save on the Job
New Law Strengthens “Secure Choice Savings Program” to Automatically Enroll Most Private-Sector Employees in Payroll-Deduction IRAs, With Worker Opt-Out Provision
ALBANY, N.Y. – AARP New York today applauded Governor Kathy Hochul for signing a new law that will empower as many as 2.5 million private sector workers to save for retirement through a strong and effective “Secure Choice” automatic enrollment payroll-deduction savings program.
The new law strengthens the State’s enacted but yet-to-be-implemented Secure Choice Savings Program by requiring private companies and non-profit organizations with at least 10 employees that don’t already offer a retirement savings option to enroll their workers in a portable Secure Choice IRA unless the employee opts out.
“Part of ensuring that New Yorkers are financially stable is guaranteeing they have a reliable retirement plan,” said Governor Kathy Hochul. “This legislation allows all workers to have a sense of relief and security when it comes to retirement.”
“Governor Hochul is empowering millions of working New Yorkers to save for a financially secure and independent retirement – while providing small businesses an effective way to attract and retain employees,” said AARP New York State Director Beth Finkel. “AARP applauds the Governor for signing this bill into law, and we thank her for her support of Secure Choice since before its enactment in 2018. We also thank the bill sponsors, Senator Diane Savino and Assemblymember Robert Rodriguez, for their tireless work to create this program by introducing the original legislation and the bill that is now law – and helping guide both through the legislative process.”
Over half New York’s 18- to 64-year-old private-sector workforce lacks access to employer-offered savings options as fewer companies offer pensions or 401(k)s than in previous decades.
The stronger Secure Choice program will particularly benefit employees of color; two-thirds of Hispanics, about 60% of Asian Americans and 52% of African Americans working in private sector jobs don’t have access to a workplace savings option.
The law will also offer businesses a virtually cost-free way to provide their employees with a workplace retirement savings benefit; a recent AARP New York survey showed about four in five small businesses in New York (79%) agreed that the legislation (S5395A/A.3213A) should be signed into law.
“Governor Hochul signing this bill to strengthen the Secure Choice program is critically important for New York’s working Hispanics and Latinos; two thirds have no pension or 401(k) – more than any other group,” said Frankie Miranda, President & CEO of the Hispanic Federation. “This will make such a difference in helping working families establish a financial footing for their later years.”
“Over half of New York’s African American private sector workers lack access to a workplace retirement savings option, and the New York Urban League is thrilled to see that our joint effort to change that has finally succeeded,” said Arva Rice, President & CEO of the New York Urban League. “The Urban League thanks Governor Hochul, Senator Savino, Assemblymember Rodriguez and the state legislature for a strong Secure Choice Savings Program so the hard-working people of all our communities finally have an effective way to save for their futures.”
New York’s new law is modeled on successful programs in California, Illinois and Oregon.
With automatic enrollment, 90% of eligible employees participate in workplace retirement savings programs. Without it, participation rates drop to 70% – mostly older employees and higher paid workers. Younger employees, women, people of color, and lower-paid workers are less likely to participate.
Participating businesses will face minimal costs. A State board will select and oversee private vendors to administer the program, companies will not match employee contributions, and businesses’ only responsibilities will be adding a line to their payrolls and providing employees the ability to opt out.
The new law also comes as a new national AARP survey of voters ages 25+ found 92% agree that elected officials should support legislation that makes it easier for all workers to save for retirement from their paycheck, while 91% support establishing a program if their employer does not currently offer them a way to save. More than 50 million American workers have no access to a retirement savings plan through their employers and 26% of non-retired people have no retirement savings.
The AARP New York survey of small businesses found:
- 85% said they couldn’t afford on their own to offer their employees workplace retirement savings plans;
- 73% agree being able to offer a portable retirement savings program would help attract and retain employees – and stay competitive;
- 84% said they support the Secure Choice program, which was enacted in 2018 as voluntary for private-sector companies and opt-in for employees, and;
- 77% are concerned they and/or their employees won’t have enough money to cover expenses in retirement – with 82% concerned as taxpayers that some New Yorkers haven’t saved enough and could become dependent on public assistance programs in retirement.
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.