NEW YORK, Jan. 23, 2017 /PRNewswire-USNewswire/ -- New York City has the green light to establish a workplace retirement savings option for private sector employees whose companies don't offer a pension or 401(k), and AARP is urging city leaders to step on the gas.
Hispanics have been hit harder than any group in New York as fewer businesses offer retirement savings plans to their employees. Two-thirds of Hispanic private sector workers statewide—more than 800,000 —lack such an option, compared to 52 percent overall.
Mayor Bill de Blasio, Public Advocate Letitia James, Comptroller Scott Stringer and City Council Speaker Melissa Mark-Viverito joined AARP and others last February to announce their intention to create a workplace retirement savings option for private sector employees whose companies don't offer one.
City leaders have been awaiting clearance from the U.S. Department of Labor. That came last week when a new department regulation took effect allowing large cities to provide private sector employees with a workplace savings option.
A similar rule clearing states to offer such an option took effect last August, and AARP is also urging Governor Andrew Cuomo and state lawmakers to act.
"Our city and state leaders have a golden opportunity to empower millions of New Yorkers to build financial security," said AARP New York State Director Beth Finkel. "The city and state should fill in the gaps left by an economy in which fewer companies are able to provide savings options."
AARP is urging the city to create an automatic enrollment option, by which a small percentage of an eligible employee's pay would be automatically deposited into a professionally-managed individual retirement account unless the worker opts out. Studies show up to 90% of employees participate.
"Auto enrollment is a win-win-win," added Finkel. "It helps workers save, allows companies that otherwise can't afford it to offer a valuable benefit to attract and retain employees at virtually no cost, and reduces dependence on public assistance by helping people remain financially independent."
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SOURCE AARP New York