State of #OurCity: Mayor de Blasio Announces Plan for Retirement Security for All New Yorkers

February 4, 2016

Latest initiative focused on combatting inequality and lifting up working families

NEW YORK—Mayor Bill de Blasio, in partnership with Council Speaker Melissa Mark-Viverito and Public Advocate Letitia James, today announced that New York is working to become the first City in the country to create a retirement savings program for private sector employees. The Mayor will highlight the announcement in his State of the City address – One New York: Working for Every Neighborhood - this evening.

"Fewer than half of all working New Yorkers have access to a retirement savings plan - and many who have started to save don't have much. We won't accept a status quo where people work all their lives only to be left with nothing," said Mayor Bill de Blasio. "That's why we're working to become the first city in the country to create a retirement savings program for private sector employees."

Most private sector workers in New York City do not have any access to a retirement savings program, and low-income, immigrant, minority, and female New Yorkers are disproportionately impacted:

• Only 43 percent of working New Yorkers 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.
• Even those who have started to save do not have much: 40 percent of New Yorkers between the ages of 50 and 64 have less than $10,000 saved for retirement.
• To simply live at poverty level for a 15-year retirement, a New Yorker would need roughly $215,000 in savings.

Mayor de Blasio, Council Speaker Mark-Viverito, and Public Advocate James will draft legislation that would enable any New Yorker working at a business with ten or more employees to automatically enroll in an employee-funded retirement plan.

• The plan would create an automatic-enrollment individual retirement account for employees at businesses of 10 employees or more that do not already have a program. Businesses that have a program could not drop their current plan to enroll in this one.
• Contributions would be exclusively from employees (rather than from employers or the City) 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.
• Employees would be able to transfer the savings account from job-to-job.
• The City would create a board to establish and oversee the management of the program, which will be phased in over the next few years. The City will also undertake a robust outreach and education effort on the program.

The City has also submitted comments to the U.S. Department of Labor in support of a federal rule change that would ensure cities could create retirement savings programs without liability or burdensome requirements.

This is the latest announcement by the Mayor aimed at lifting up working families – from paid sick and parental leave, to living and minimum wages, this has been a focus of the de Blasio administration.

"All New Yorkers should have access to resources that will help them better plan for their future,” said Council Speaker Mark-Viverito. “I’m pleased the de Blasio Administration will be supporting Council legislation to make it easier for private sector employees to save for retirement, and I thank Mayor de Blasio and my council colleagues for their support on this issue. In particular, Council Member Ben Kallos and Public Advocate Tish James have been energetic supporters of this proposal.”

“Millions of hard working New Yorkers are facing a life of poverty and destitution when they retire,” said Public Advocate Letitia James. “It is imperative that we create the infrastructure for New Yorkers to save for retirement and prepare for the future. I am proud to partner with Mayor de Blasio and Speaker Mark-Viverito in making retirement security for all New Yorkers a priority for our City. Every New Yorker deserves to live their golden years in dignity and our legislative action will help make this goal a reality."

“Our city's working families need an equal shot at attaining retirement security. This initiative will strengthen our joint vision for a New York City where nobody has to retire in poverty. I look forward to working with the Administration and the Speaker to make this a reality,” said Council Member Julissa Ferreras, Chair of the Committee on Finance.

"I commend Mayor de Blasio for coming up with a solid initiative that will allow thousands of private employees to plan for a financially secure retirement, something that would not have been possible for many of them otherwise," said Assemblyman Steven Cymbrowitz, Chair of the Assembly Aging Committee. “With the population of older adults increasing every year, helping members of the workforce prepare for the future is an issue of increasing concern and I'm pleased that the Mayor is addressing it." 

"The plan proposed by Mayor de Blasio is a significant step toward helping middle class and economically struggling city residents save for a self-sufficient retirement by creating the first city-facilitated, payroll deduction workplace retirement savings option in the nation. Americans are 15 times more likely to save if they can do so through payroll deduction, and over three quarters of New York City's working Generation X and Baby Boomer voters favor the kind of plan the Mayor proposed, according to a 2015 AARP-commissioned survey. AARP strongly supports Mayor de Blasio's plan, and we stand ready to work with him to turn this plan into reality for the benefit of our members and the larger New York City community." stated David McNally, Director of Government Affairs & Advocacy at AARP New York.

“The business community supports the Mayor's commitment to improve the retirement security of New Yorkers and we look forward to working with him to develop a local program that achieves that objective,” said Kathryn Wylde, President and CEO of the Partnership for New York City.

“The retirement savings crisis will devastate this country if millions of retirees fall into poverty. I applaud Mayor de Blasio for leading the way on an important national issue that must be addressed,” said Hamilton (“Tony”) E. James, President and Chief Operating Officer of Blackstone.

"The important task of planning for retirement will become easier for New York’s private sector workforce,” said John H. Banks, III, President of The Real Estate Board of New York. “I want to thank Mayor de Blasio for establishing an individual retirement account program for private sector workers. Allowing workers the convenience of saving through automatic payroll deductions and enabling employees to bring accounts with them if they leave for other jobs are two common sense features of the program that will encourage New Yorkers to make smart decisions about retirement planning.”

"From raising wages to expanding paid sick leave and paid parental leave, New York City has become a national leader on issues that matter to working families over the past two years. Creating a retirement plan for private sector employees would be one more important step forward. This plan – the first of its kind for any American city – would give more New Yorkers the chance to save for retirement without paying unnecessary fees to Wall Street. We applaud Mayor de Blasio, Speaker Mark-Viverito, and Public Advocate James for their leadership on this proposal,” said Bill Lipton, State Director of New York Working Families Party.

"Businesses thrive only when there are enough customers with enough income to afford goods and services. In fact, national, scientific polling of small business owners, commissioned by American Sustainable Business Council found that 70 percent of small business owners identified the lack of retirement security as a critical issue to their business interests. This plan should give every business leader more confidence in the future strength of our economy since more New Yorkers will have increased retirement savings, which eventually will  be spent in the economy, fueling new growth and job creation," said David Levine, CEO American Sustainable Business Council which represents over 200,000 businesses.

“Access to retirement with dignity is a vital component to providing economic security for working families in New York City. By creating legislation that would require most private sector employers to provide IRA’s for their employees, Mayor de Blasio has once again shown that he is committed to supporting and fighting for working people, close to 60 percent of whom do not have access to employer provided retirement accounts in New York City. We are proud to stand with the Mayor and support his bold new initiative,” said Peter Ward, President of New York Hotel and Motel Trades Council. 

“Too many working New Yorkers face the prospect of getting older with no retirement savings -- rather than retiring with the respect and dignity that they deserve. I applaud Mayor de Blasio and Speaker Melissa Mark-Viverito for taking this crucial issue head on, creating a new kind of private sector ‘minimum pension,’ analogous to the minimum wage, that will set a floor for retirement security and ensure that more workers can enjoy a decent, dignified retirement. And critically, this program is an important step towards re-establishing the idea that every working person deserves a decent pension,” said Bob Master, Assistant to the Vice President at Communications Workers of America, District 1.

“The National Conference on Public Employee Retirement Systems (NCPERS) applauds Mayor de Blasio for his leadership in proposing a New York City based retirement savings initiative. NCPERS welcomes all policymakers and proposals that further retirement security for working Americans,” said Mel Aaronson, President, and Hank Kim, Executive Director & Counsel, National Conference on Public Employee Retirement Systems.

“This is a wonderful plan that could be transformational for working New Yorkers. This plan provides a way for workers to responsibly provide for their financial future while leveraging a business’ infrastructure without being overly burdensome. It is the right thing to do and I wholeheartedly support this plan. Any responsible business person managing a business should also endorse this plan as they are not only responsible for managing their business, but should also take an active interest in the well-being of their employees and their families. Indeed, that is good business and would provide for a more productive work force. I applaud the Mayor for developing an ‘out of the box’ solution and providing leadership that should provide for a stronger New York City with a more financially secure future for its citizens,” said Tracy Maitland, CEO at Advent Capital Management.

Igal Jellinek, Executive Director of LiveOn NY said, "LiveOn NY applauds Mayor de Blasio, Speaker Mark-Viverito and Public Advocate James for introducing groundbreaking legislation to establish a retirement savings plan for New Yorkers who now do not have that opportunity. As the leading voice for low income older New Yorkers, we know well the struggle to live without enough money in old age. Health care, affording the rent, adequate nutrition and quality of life are all negatively impacted by lack of money. Growing old without enough money can be frightening and daunting. This plan must be implemented."

“It’s exciting to see Mayor de Blasio introduce a program that will enable all workers to save for their retirement. This is a goal that all businesses should support – providing workers with an opportunity to fund their own retirement. Along with his support for increasing the minimum wage and providing for Paid Family Leave, I’m very pleased that our Mayor understands that our workers need to succeed in order for our businesses to thrive,” said David Bolotsky, Founder & CEO of UncommonGoods.

“Providing private sector employees with access to a great savings plan is an extremely positive and forward-thinking initiative that will allow countless New Yorkers – particularly young, low-income, immigrant, minority, and female residents – to invest in their futures and take advantage of an incredible benefit enjoyed by public sector workers,” said Brooklyn Chamber of Commerce President Carlo Scissura. “New York is usually a trailblazing city, so it is no surprise that we are leading the way for the rest of the country on this issue. I want to thank Mayor Bill de Blasio, Council Speaker Melissa Mark-Viverito and Public Advocate Letitia James for spearheading this legislation, which will result in a brighter horizon for both businesses and employees alike.”