New York is the Latest State to Approve Retirement Savings Program

More working New Yorkers will have an easy and effective way to save for their future thanks to the state’s newly-enacted Secure Choice Savings Plan.

This innovative program will be a game-changer for millions of working New Yorkers.

Proposed and signed into law by Governor Andrew Cuomo as part of the recently enacted New York State budget, Secure Choice ( Part X, pages 7-15) will make a virtually cost- and hassle-free employee workplace savings option available to companies that don’t already provide their workers a way to save.

It could help up to 3.5 million New Yorkers who work for a company that offers no pension, no 401(k), no retirement savings option. That’s over half the state’s workforce – including 67 percent of Hispanics, 60 percent of Asian Americans and 52 percent of African Americans.

Social Security alone isn’t enough. And the average household nearing retirement has only $14,500 saved.

 

Secure Choice sets up a professionally managed, payroll-deduction Roth IRA that participating employees can take from job to job, allowing them to save with every paycheck and build financial security steadily and reliably. Americans are 15 times likelier to save if they can do so through work, and participation rates near 90 percent for automatic payroll deduction.

Secure Choice will also be a great tool for small companies to attract and retain quality workers. And 73 percent of New York small businesses that don’t provide their own savings plan said they probably would offer a state-facilitated option if one became available, a 2017 AARP survey found.

Plus, Secure Choice will be good for taxpayers, since it will help more New Yorkers build financial security and lessen their future reliance on public assistance.

For AARP New York, enactment of Secure Choice is the culmination of more than three years of work.

We rolled out our first survey about retirement insecurity, appropriately titled “ High Anxiety,” in spring 2015. That’s the year a bill to establish a Secure Choice-type program was first introduced in our state legislature by Senator Diane Savino and Assemblymember Robert Rodriguez.

“High Anxiety,” successive surveys, and our dogged advocacy – aided by scores of our volunteers around the state both at the capital and in their home communities – helped generate media coverage and awareness among policymakers about the need to fill the yawning retirement security gap.

Governor Cuomo responded by establishing a commission in 2016 to study the issue, then including Secure Choice in his state budget proposal in January.

Once the Governor’s proposal was on the table, we never let up on our state legislators to ensure Secure Choice remained in the final state budget – and our small businesses, workers and taxpayers will be the better for it.

Beth Finkel is AARP’s New York State Director.

• NYT: New York Envisions a State-Run Retirement Plan for Private Workers
• WSJ: New York Tees Up a State-Sponsored Retirement-Savings Plan
• Newsday: NY private-sector employees to receive retirement savings plans
• El Diario: Durante la vejez es cuando la economa aprieta ms a los latinos
• The Buffalo News: Editorial: Help workers help themselves
• Spectrum News (Capital Tonight): Secure Choice Included in State Budget
• USA TODAY: Retirement planning: Many states looking to help workers without employer plans save
• CNBC: New York gives the green light to retirement plan for workers without one