When he introduced legislation on retirement security legislation last year, Councilman I. Daneek Miller said the need to pass the bill was much like the climate change crisis: it is something that needs to be addressed sooner rather than later.
Now, Mayor Bill de Blasio — who called for new retirement-savings system during his last State of the City address — joined Miller and Councilman Ben Kallos, AARP and advocates to rally at City Hall Monday in support of their two measures that would make New York the first city in the nation to create a universal retirement savings program for private sector employees.
“Over a million New Yorkers work their whole lives and have nothing to show for it,” de Blasio said. “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 have earned.”
Currently, about one and a half million private sector employees in New York City have no access to a retirement savings program through their employer. Miller and Kallos introduced legislation that would enable New Yorkers in the private sector to automatically enroll in an employee-funded retirement fund, calling the right to retire part of the American Dream.
“Fulfilling the goal of retirement is fast becoming a lost art in America. 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,” Miller said before chairing a hearing on the legislation. “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.”
Contributions into the retirement-savings program would be exclusively from employees 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 and employees would be able to transfer their savings account from job to job.
“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,” Congressman Gregory Meeks said.
Congresswoman Carolyn Maloney said people deserve peace of mind knowing their hard earned benefits would be available when they need them.
“Sadly, too many New Yorkers suffer from retirement insecurity,” she said. “I’m grateful that the city has introduced a plan to curb this problem and help more New Yorkers retire with dignity.”
The legislation has widespread support among the Queens delegation to the City Council.
“This plan will bring a greater degree of financial security to thousands of working people in our city,” Councilman Daniel Dromm said. “For many New Yorkers, retirement is simply out of reach. Housing and medical costs can be overwhelming, and makes 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.”
Only 43 percent of working New Yorkers currently 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.
“Access to retirement is a vital component to providing economic security but many people lack the means to adequately prepare,” Councilwoman Adrienne Adams said. “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.”