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Wide Range of Organizations Urges NYS Senate to Strengthen NY’s Retirement Savings Program

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16 Groups Sign Letter to Leader Stewart-Cousins Calling on ‘Secure Choice’ to be Automatic for Private Sector Workers Who Lack Access to Workplace Option

ALBANY, N.Y. – Sixteen organizations representing consumers, business owners, New Yorkers of color and faith leaders are urging New York State Senate Majority Leader Andrea Stewart-Cousins to ensure passage of legislation to strengthen the State’s savings program for private-sector employees before it takes effect next year.

The bill (S5395A–Savino), which passed the State Assembly earlier this month in a bipartisan, 121-26 vote (A3213-Rodriguez), would make New York’s Secure Choice Savings Program as comprehensive as the strongest such programs in the nation.

The legislation would require private companies with at least 10 employees that don’t already provide their workers a retirement savings option to offer them a “Secure Choice” portable, payroll-deduction IRA – and to enroll the employees automatically unless they opt out.

“This is the State’s chance to make Secure Choice as strong and effective as possible and empower as many of New York’s private sector employees as possible to save for a financially secure and independent future,” said AARP New York State Director Beth Finkel. “This bill is modeled on California’s successful automatic enrollment savings program.”

People are 20 times more likely to save for retirement if they’re automatically enrolled in a workplace program.

Over 3.5 million 18- to 64-year-old private-sector workers in New York – including 67% of Hispanics and 52% of African Americans - more than half in all – work for a company that offers no retirement savings option.

“AARP New York is proud to stand with leading organizations representing a broad spectrum of New Yorkers in calling on Senate Leader Stewart-Cousins to put this bill on the floor for a vote before the end of the 2021 state legislative session – and for Governor Andrew Cuomo to sign it into law,” added Finkel. “We thank Assembly Member Robert Rodriguez and Senator Diane Savino for their leadership in sponsoring and advocating for this important legislation.”

The organizations, including the Hispanic Federation, NAACP of New York, Urban League of New York and Asian American Federation, signed a letter to Senate Leader Stewart-Cousins, which is reprinted in full below.

Contact: Erik Kriss, ekriss@aarp.org

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May 20, 2021

Hon. Andrea Stewart-Cousins
Majority Leader
New York State Senate
907 Legislative Office Building
Albany, New York 12247

RE: Strengthen the New York Secure Choice Savings Program (S.5395-A Savino)  

Dear Leader Stewart-Cousins: 
                                                                                                                  
Thank you for your leadership during this challenging time. As the end of this year’s legislative session approaches, our organizations urge you to bring S.5395-A (Savino) to the floor and urge the Senate to pass this legislation to ensure more New Yorkers can save for retirement and secure their financial future. The Assembly same-as version, A.3213 (Rodriguez) passed the New York State Assembly with a strong vote of Y:121 and N: 26.

The New York Secure Choice Savings Program was enacted in the FY 2018-19 state budget. S.5395-A (Savino) would strengthen the program (which is set to be implemented next year) to make it consistent with successful programs in effect in California, Oregon, and Illinois, to name a few, by expanding coverage to more employers and employees.

Unfortunately, access to a retirement plan differs substantially by race and ethnicity in New York. About 67 percent of Hispanic workers and about 52 percent of African Americans lacked access to an employer-provided retirement program. New Yorkers of color accounted for about 47 percent (1,649,000) of the roughly 3,507,000 employees without a workplace retirement plan. [1]

California, Oregon, and Illinois—each implementing their own state-facilitated retirement savings program that automatically enrolls employees and requires eligible employer participation—have seen tremendous growth and success since inception. Georgetown University’s Center for Retirement Initiatives reports that in each state, participants contribute on average between $106 to $136 per month towards their retirement. Cumulatively, these states have recorded a 30.9 percent increase in total assets in the first quarter of 2021 alone. [2]

State-facilitated retirement programs are a cost-effective solution for business owners to offer access to a retirement savings option for their employees, without having to administer a burdensome, costly program on their own. In fact, a recent AARP survey showed two thirds of small businesses across New York, defined as those with up to 99 employees, support the idea behind Secure Choice. [3]

It is equally critical that this program automatically enroll employees. With automatic enrollment, 90 percent of eligible employees participate in a workplace retirement savings program. Without it, the participation rate drops to 70%, mainly consisting of older employees and higher paid workers. Younger employees, women, people of color, and lower-paid workers are less likely to participate. [4]  

Too many New Yorkers lack access to retirement savings options through their place of employment and too many New Yorkers find themselves ill-prepared for retirement. We can do better in New York. Strengthening the Secure Choice Savings Program will empower more people to take charge of their financial future. 

Our organizations strongly believe that passing S.5395-A (Savino) can make New York a better place for people to live and retire with independence and dignity. It is critical that this legislation become law before the program rolls out next year. We call upon your leadership to ensure that this bill secures final legislative passage and is sent to the Governor this year.  

Sincerely,

Beth Finkel
State Director
AARP New York

Pastor George Nicholas
Chair of African American Health Equity Task Force
Buffalo Center for Health Equity

Jo-Ann Yoo
Executive Director
Asian American Federation

Richard Berkley
Executive Director
Public Utility Law Project of New York

Sarah Ludwig
Founder & Co-Director
New Economy Project

Frankie Miranda
President and CEO
The Hispanic Federation

Hazel Dukes
New York State Chapter President
NAACP

Maria Alvarez
Executive Director
New York StateWide Senior Action Council

Arva Rice
President & CEO
New York Urban League

Ann Marie Cook
President & CEO
Lifespan of Greater Rochester

Kristin Brown 
President & CEO
Empire Justice Center 

Blair Horner
Executive Director
New York Public Interest Group

Minerva Perez 
Executive Director
OLA of Eastern Long Island

Chuck Bell
Programs Director
Consumer Reports

Theresa Regnante
President & CEO
United Way of Long Island

Eric Alexander
Director
Vision Long Island

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[1] https://www.aarp.org/content/dam/aarp/ppi/2015-08/aarp-new-york-fact-sheet.pdf

[2] https://cri.georgetown.edu/states/state-data/

[3] https://www.aarp.org/research/topics/economics/info-2017/ny-sbo-without-retirement.html

[4] https://www.aarp.org/content/dam/aarp/ppi/2017/01/Default-Contribution-Rate.pdf

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