Time to Empower Working NYers to Start Saving; Governor Cuomo Should Act Now
As fewer companies offer pensions or even 401(k)s, too many hard-working New Yorkers lack a way to save for retirement at the workplace.
More than 3.5 million private-sector employees in our state lack access to a workplace retirement savings option – with workers of color disproportionately disadvantaged.
Two thirds of Hispanic/Latino, about 60 percent of Asian American Pacific Islander, and around 52 percent of African American/Black employees work for companies or not-for-profits that offer no retirement savings vehicle.
Help could be on the way for many of them and other similarly situated workers with the stroke of Governor Andrew Cuomo’s pen. A bill sponsored and advocated by Assemblyman Robert Rodriguez and Senator Diane Savino (A3213A /S5395A) – approved by the State legislature with strong, bi-partisan votes – would strengthen New York’s yet-to-be-implemented Secure Choice Savings program 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.
The measure would require private employers with at least 10 employees that don’t already provide a workplace savings option to offer Secure Choice – a portable, payroll-deduction Individual Retirement Account (IRA) with an opt-out provision for workers who don’t want to participate. The program would be facilitated by the State, similar to New York State’s successful 529 College Savings Program – with virtually no cost to employers.
This should drive higher participation, helping ensure success; 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, as the legislation calls for.
Georgetown University’s Center for Retirement Initiatives reports that in several states operating the program, 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 can achieve that kind of success in New York State – and strive for even better results.
Governor Cuomo has led this state through one of the worst public health crises of our time. AARP urges the Governor to demonstrate that kind of leadership on this issue; he should sign the Rodriguez-Savino bill into law as soon as possible to ensure New York’s yet-to-be-implemented Secure Choice Savings program’s success – and empower millions of New Yorkers to start saving for a financially secure and independent future.
There’s no reason to delay.
Beth Finkel is AARP New York State Director.
