NEW YORK, Aug. 25, 2016 /PRNewswire-USNewswire/ -- AARP today praised the finalization of a rule by the U.S. Department of Labor (DOL) that confirms states can facilitate the creation of automatic enrollment retirement savings plans for use by small businesses.
AARP New York urged New York State – where over half of all private sector workers lack access to a workplace retirement savings plan - to take advantage of the new rule. Nationwide, these public-private partnerships have the potential to help more than 55 million American workers who lack access to a way to save for retirement automatically out of their regular paycheck. In New York, such a plan could help over three million private sector workers.
The Department of Labor also issued a draft rule that would pave the way for large cities – including New York City – to enact similar plans.
"We applaud the White House and Labor Secretary Perez for their support of state legislative efforts to improve access to workplace retirement savings plans for millions of Americans who currently have no way to save for retirement at work," said Nancy LeaMond, Executive Vice President of AARP's Community, State and National Group.
"AARP New York urges Governor Cuomo and our state lawmakers to take advantage of this opportunity to help over three million private sector workers in New York by providing an effective way for them to save their own money and create a financially secure future," said Beth Finkel, State Director of AARP in New York State.
"In New York City, Mayor de Blasio, Comptroller Stringer, Public Advocate James and City Council Speaker Mark-Viverito have all thrown their support behind such a plan for the city, and we are excited that the U.S. Department of Labor is developing a similar rule for large cities," Finkel noted. "AARP supports the city's efforts and we look forward to working with Governor Cuomo's NY-SMART Commission to develop a plan for all New Yorkers – a plan that would help them move toward financial self-sufficiency and lessen the need for public assistance at a time when company pensions and 401(k)s are becoming a thing of the past."
AARP New York supports the bi-partisan "Secure Choice" legislation, which has been introduced in both houses by Senator Diane Savino and Assemblyman Robert Rodriguez and has attracted 90 co-sponsors in the 150-member State Assembly.
AARP is pleased that the new rule addresses the importance of features such as payroll deduction and automatic enrollment. Without these options, plans are far less effective at helping people save their own money for retirement.
"We know that workers who have access to automatic enrollment plans are 15 times more likely to save for their future," said LeaMond. "As a result of the new rule, states will be able to make available to tens of millions of Americans workplace savings vehicles that will help them save more for their retirement years."
More than half of the states are considering ways to address economic insecurity in retirement. Four states have already enacted legislation creating Work and Save plans that would be impacted by this rule: Illinois, Oregon, Connecticut, and Maryland. Legislation in California is also anticipated in 2016.
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SOURCE AARP New York