“Retirement should be for everybody, not just for people who work in offices here in Manhattan, and not just for people lucky enough to have a pension,” Onza Lynch, a Bronx commercial carter, said at a Sept. 23 rally to push legislation that would establish a universal retirement savings plan for private-sector employees across the city.
Mayor de Blasio, City Council Members I. Daneek Miller and Ben Kallos, and advocate groups including the American Association of Retired Persons spoke of the importance of retirement security at the City Hall event.
Fewer Private Pensions
Only 41 percent of working New Yorkers—more than 1.5 million employees—have access to a retirement plan through their employer, down from 49% a decade ago, according to a report from The New School’s Schwartz Center for Economic Policy Analysis. And 40 percent of New Yorkers between the ages of 50 and 64 have less than $10,000 saved for retirement, the de Blasio administration stated.
“It used to be that many, many more people had a secure retirement,” the Mayor said. “Many more people were labor-union members. Many more people planned on and received the benefits they deserve. That’s been declining and declining in this country. We’re going [in] the wrong direction.”
Studies have shown that people are 15 times more likely to save for retirement if their job offers a plan. The bill, introduced by Councilmen Kallos and Miller, would mandate that businesses with 10 or more employees that don’t offer retirement savings accounts participate in the plan, at no cost to the employer.
Employees working 20 hours or more would be automatically enrolled, but would be allowed to opt-out. Contributions would be based on a default rate of 3 percent (which can be changed), and would be paid by employees exclusively. The city would also establish a board to oversee the program by the end of 2021.
Good for City Economy
Beth Finkel, state director at AARP’s New York office, noted that boosting income security for retirees would benefit the economy: New Yorkers who were 50 or older contributed $70 billion to the city. Mr. Miller noted that a universal retirement plan would especially help families of color, who have seen their finances plummet over the past few decades.
Although only private-sector employees would be eligible, District Council 37 expressed support for the proposal.
“Retirement is and should be a right and not a privilege. Social Security alone doesn’t cut it anymore,” said the union’s Assistant Associate Director Jahmila Edwards. “When we have fewer than half of all New Yorkers being able to save for retirement, we have what we call a retirement crisis.”
Minimal Cost to City
The program’s cost to the city would be between $1.5 million and $3 million for the first three years, the Mayor estimated, and would eventually become self-funded. A similar initiative in Oregon was self-funded after two years.
Mr. Lynch mentioned that he would not be able to continue working his physically-demanding job into his senior years. “I know I can’t do this job forever, because my body won’t allow it. I don’t want to work until I die,” he said.