By Beth Finkel
It takes resolve to address a crisis – and Gov. Andrew M. Cuomo has applied it on multiple major issues. We are looking to him once again to lead the way on behalf of more than 3.5 million working New Yorkers.
That’s how many people in this state go to work each day with no way to save for their retirement on the job.
The pensions and even 401(k) plans that our parents and grandparents took for granted when they went to work are becoming rarer and rarer – to the point where more than half the private sector workforce now lacks access to any such option – including two thirds of Hispanics.
“Americans face a growing retirement crisis,” Cuomo himself wrote in his January 2016 State of the State message. “Increasing numbers of employees work for a company that does not offer a retirement plan … (including) approximately 3.5 million private sector workers aged 18 to 64 in New York. Many of these workers face delayed retirements and reduced standards of living, and will be forced to rely on the state’s taxpayer-funded social safety net.”
Cuomo has the opportunity to address the crisis head-on by including in his 2018-19 state budget proposal a low- and potentially no-cost way for employers to offer their workers a payroll deduction retirement savings plan.
Such a proposal has already been introduced in the 213-member state Legislature – and has over 100 co-sponsors of both parties. Secure Choice would allow employers to provide their workers a Roth IRA through payroll deduction if the company doesn’t already offer a retirement savings plan.
Secure Choice would be voluntary for both employers and their employees. But workers are 15 times more likely to save if they have the option to do so on the job.
By pooling contributions from participating private sector employees around the state into funds managed professionally by a vendor chosen by a state board, Secure Choice would keep fees low.
Roth IRAs require no employer contributions, and Secure Choice carries minimal state and administrative costs.
Many small businesses would love to provide their employees a retirement savings option but can’t afford to; in fact, 80 percent of New York small businesses think state lawmakers should support a plan to make it easier for them to offer their employees a way to save for retirement, an AARP survey found.
And a 2016 AARP NY/Siena College poll showed 68 percent of Erie County’s Generation Xers and baby boomers support a state-facilitated workplace retirement savings option for those who lack access – with 82 percent statewide supporting the idea.
Secure Choice is a great way to extend a helping hand to New Yorkers – like the 529 program that New Yorkers have been using for two decades now to save for their children’s college education.
Illinois, Oregon, California, Connecticut and Maryland have already enacted similar plans. It’s high time New York joins them.
Beth Finkel is AARP New York State director.