Survey: Most NY Small Businesses Support Strengthening NY’s Retirement Savings Program
AARP Urges Governor Hochul to Sign Legislation Empowering as Many as 2.5 Million Private Sector Workers to Save Through Payroll Deduction
ALBANY, N.Y. – About four in five small businesses in New York (79%) agree legislation to empower as many as 2.5 million private sector workers to save for retirement through an effective payroll-deduction program should be signed into law, a new survey shows.
The legislation, if signed into law by Governor Kathy Hochul, would particularly benefit employees of color. Over half New York’s 18- to 64-year-old private-sector workforce lack access to employer-offered savings options – including two-thirds of Hispanics, about 60% of Asian Americans and 52% of African Americans.
- Require private companies and non-profit organizations that employ at least 10 people and don’t already provide them a savings option to offer their employees a portable, payroll-deduction Individual Retirement Account (IRA), and;
- Automatically enroll employees unless they opt out.
“This is a great opportunity for Governor Hochul to empower millions of 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.
Businesses would face minimal costs. A State board would select and oversee private vendors to administer the Secure Choice Savings Program – which was enacted in 2018 but has yet to be implemented. Companies would not match employee contributions, and their only responsibilities would be adding a line to their payrolls and providing employees the ability to opt out.
The 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.
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.
“With Mayor Bill de Blasio having signed a version of this program into law for New York City recently, if Governor Hochul signs this legislation, once sent to her, it would put millions of New Yorkers on the road to saving for a financially secure future” said Finkel.
The telephone survey of 205 owners or employee benefit decision makers of companies or non-profit organizations with 10-100 employees that don’t currently offer a retirement savings option for their workers was conducted July 7-26, with owner names and companies provided by Data Axle USA and weighted using 2017 U.S. business statistics from the U.S. Census Bureau. The survey’s margin of error is plus or minus 6.8%.
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.