New York CIty Council Member Ben Kallos

Crain's New York De Blasio makes push for city-run universal retirement program by Will Bredderman

De Blasio makes push for city-run universal retirement program

Mayor Bill de Blasio might have given up his White House ambitions, but he's not backing down from his feud with President Donald Trump.

De Blasio rallied at City Hall with the AARP and other advocates for a bill that would establish a city-managed individual retirement account and automatically enroll private sector workers who do not have access to a 401(k) or pension program through their employer. The renewed push for the "universal retirement" initiative, which follows a similar effort the mayor made five years ago, comes in spite of Trump and Congress's repeal of an Obama-era rule which explicitly permitted such systems—and which already exist in Oregon, California, Illinois, Connecticut and Maryland.

"The Obama administration Labor Department was working with us," de Blasio said at the gathering in the rotunda. "And then the election changed everything, and we had to reset the strategy, which we have done."

The administration believes that existing federal law allows such a program, even after the revocation of the Department of Labor's administrative order.

"We believe we're on very strong legal ground," said John Adler, director of the mayor's office of pension and retirement affairs.

The bill, sponsored by Queens Councilman I. Daneek Miller and Manhattan Councilman Benjamin Kallos, would apply to any private sector employer of 10 employees or more. Kallos promised at the event that it would cost businesses nothing, though they would be responsible for making the deductions from their payroll and giving the set-aside funds to the city. 

The legislation would automatically dock 3% of an employee's income, although the individual could choose to subsequently adjust that figure or opt out of the program entirely. De Blasio estimated that the new retirement system would have a "small initial start-up cost" of $1.5 million to $3 million annually for the first three years, after which it would sustain itself off investment earnings.

Although the proposal received a hearing on Monday, its path to realization remains unclear: only six of the council's 51 members have signed on to the measure thus far.

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