Gotham Gazette Federal Government Halts City’s Plan to Establish Private Sector Retirement Savings Program May 04, 2017 | by Ben Max by Ben Max

Gotham Gazette
Gotham Gazette
Federal Government Halts City’s Plan to Establish Private Sector Retirement Savings Program May 04, 2017 | by Ben Max
Ben Max
05/04/2017

Through a recently-signed resolution, President Donald Trump and the Republican-controlled Congress have struck a death blow to New York City’s plan to become the first city in the country to establish a retirement savings program for private-sector employees.

After advocates and elected officials identified a crisis in the limited amount most workers have saved for retirement and started calling for government action, Mayor Bill de Blasio announced during his February 2016 State of the City speech that New York would set on a path to create a system whereby almost all private-sector employees would have mandated access to a retirement savings program.

There would be no city match of money or guarantee of pension payouts, like with the public employee system, but the city would help launch, promote, and oversee a program that provided employees at most private-sector companies the opportunity to put aside retirement savings money in a managed investment account. .......

 

Despite the move by federal officials to block cities from instituting such programs, Public Advocate James and Council Member Kallos decided to symbolically introduce legislation for a city system.

“The federal government is failing our seniors when it comes to retirement security,” James said in a statement. She and Kallos are urging Trump to veto the state-related resolution if it gets to his desk through the Senate.

Kallos told Gotham Gazette that he and James felt it was important to introduce the city legislation anyway, and that perhaps there is hope for the future. “We had wanted to introduce it before [the federal resolution] was signed, but even after it was signed we felt it was worth introducing, because maybe one day we’ll be able to move forward.”

“Most New Yorkers aren’t saving for their retirement,” Kallos said, adding that New Yorkers should know it is the federal government that is helping to hold them back. The city program would be “opt out,” meaning that eligible workers would be automatically enrolled through their employers and have to actively choose to not participate. The only contributions would be from the employees, likely starting at a low fixed percentage of earnings with the ability to dedicate more toward what would in most cases be low-risk investment.

Kallos said that he and James have been working closely with the de Blasio administration and its federal lobbyists. “Tish has been in the lead,” he said of James, “the City Council has played a role, and the Mayor’s Office has been pushing in D.C.”

The two bills (Int. 1574 and Int. 1580) introduced by James and Kallos would establish a program and a board to oversee it. “The Board would be established to administer the plan, engage in rulemaking, auditing, and reporting, along with public education and community outreach forums,” according to information from the offices of Kallos and James. “The plan would cover all employers with more than ten employees that did not already offer a retirement plan. At no cost to the employer, private sector employees would be automatically enrolled, with an option to decline, in a payroll deduction pre-tax retirement savings plan administered by the City.”

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