ALBANY -- New Yorkers might have easier access to retirement savings plans if a program called Secure Choice is kept in the state’s budget this April.
Lt. Gov. Kathy Hochul and AARP in recent days have urged state legislators to vote the program into law, saying it would provide a new way for workers to save for retirement.
“I have always understood the stresses our seniors are under when it comes to enjoying financial security in their later years,” said Lt gov. Kathy Hochul in a statement. “In our state, we believe that the Secure Choice payroll deduction will create savings that will protect our seniors after a lifetime of work.”
Secure Choice would create a voluntary payroll deduction to help New Yorkers save for retirement who might not be able to otherwise.
The program would establish a retirement savings plan through an IRA payroll deduction through employers.
Employee contributions would be managed by a professional investment firm overseen by the state, and each employee would own their IRA – and could take it to any new job.
Businesses wouldn't have any responsibility and would not match employees’ contributions. They would only need to add an automatic deduction line to employees’ paychecks.
Cuomo included the measure in his state budget for the fiscal year that starts April 1, and legislative leaders and the Democratic governor will negotiate a final spending plan in the coming weeks.
AARP and dozens of other organizations around the state sent a letter earlier this month to legislative leaders to include Secure Choice as a part of the state’s budget.
In the letter, it stated that people who have access to a retirement savings plan at work are 15 times more likely to save for retirement than people who do not.
According to AARP, three out of every four New Yorkers are in favor of the creation of this type of retirement savings system.
Around 52 percent of households age 55 and older do not have any retirement savings, according to the US Government Accountability Office.
And the Social Security Administration said the average annual social security benefit is about $15,500 in New York.
“Saving for a secure retirement is becoming harder and harder as fewer businesses are able to offer their employees a pension, a 401K or any kind of savings plan,” said AARP State Director Beth Finkel in a statement.
“We and our members are here today from across New York to tell our lawmakers that they need to fill the gap.
