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From New York Times: Mayor De Blasio Proposes Retirement Savings Plan for Private-Sector Workers

By J. DAVID GOODMAN FEB. 25, 2016

Amid visions of a new Brooklyn-Queens streetcar line and a repurposed Governors Island, one progressive aspect of Mayor Bill de Blasio’s State of the City address this month was obscured.

The mayor wants to create a way for New York City’s estimated 1.4 million private-sector workers who do not have employer-sponsored retirement plans to set aside money in a city-organized retirement savings program.

The city’s effort follows a wave of such proposals that have been passed or are being considered in statehouses across the country, including in California, Illinois and Oregon. The movement received a significant push from President Obama last year when he ordered the Labor Department to revise its regulations to help to allow such state-based accounts. Those rules are expected to be made final this year.

While the mayor talked on Thursday of the benefits to workers, the theatrics of the news conference — a rally-style event under the Corinthian columns of the City Hall rotunda, with supporters from AARP in matching red T-shirts arrayed behind him — were aimed squarely at Washington.

That is because the city’s proposal, which would be in legislation expected to be introduced in the City Council next month, is contingent on the federal government’s making a further change to the regulations to allow some cities, like New York, to create the savings plans, and not just states. City officials noted that the population of New York City is greater than most states.

 

Without the change, Mr. de Blasio said flatly, the plan could not go forward.

In that way, the push by the city to get federal action — including letters to the Labor Department from Mr. de Blasio and the city’s comptroller, Scott M. Stringer — provided another reflection of the difficult relationship between Gov. Andrew M. Cuomo and the mayor.

There has been some informal coordination on the issue between Albany and City Hall, said Bill Samuels, the founder of EffectiveNY, a nonprofit group devoted to government reform, and an occasional critic of Mr. Cuomo’s, who stood behind Mr. de Blasio at the news conference. “It’s not adversarial; it’s just complicated,” Mr. Samuels said in an interview. “We all know we need a state program.”

The governor is not opposed to establishing a retirement savings plan: In January, he announced the creation of a commission to study how such a system would work in the state.

“We welcome action everywhere,” Mr. de Blasio said when asked why the city began its effort before the state. “There are some states — many states, in fact — where their state governments do not necessarily reflect the viewpoints of their cities, where you might have a city willing to do something that a state government would not.” He said for that reason cities should be empowered to start the accounts.

The plan would require private businesses with 10 or more employees to create a way for them to contribute directly from their paychecks to the accounts, which are likely to be individual retirement accounts. (No such state or city plans are in place so far, in part because of the uncertainty about the federal rules.)

New York City would establish a board to select a vendor that would manage the investments, which would not be guaranteed by the city. The plans could be transferred between jobs.

“With auto-enrollment, people will be nudged into saving for retirement,” said Councilman Ben Kallos, a Democrat from the Upper East Side of Manhattan, who will be one of the sponsors of the legislation once it is introduced. Though people can choose not to participate, he said, city officials hope that most would.

“It’s one of the key pieces: It would be opt out, rather than opt in,” said Beth Finkel, the New York State director for the AARP. “Historically many people do not take the initiative on their own.”

Mr. Stringer’s office has been studying the issue since last year. He appeared at the news conference to draw attention to the issue, though his office said he had yet to settle on the sort of proposal he would support.

See the original article here

 

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