The Americans for Financial Reform Education Fund and its Take on Wall Street campaign launched a digital platform, ESGexplainer.org, to provide information about environmental, social and governance factors in investing, according to a press release from the nonprofit.
The ESGexplainer.org site contains ESG introductory guides; examines potential impacts of anti-ESG legislation; and emphasizes the significance of responsible investing for modern financial decisionmaking and worker retirement security.
“We launched this website to demystify ESG investing amidst widespread disinformation campaigns,” says Natalia Renta, senior policy counsel for corporate governance and power at Americans for Financial Reform Education Fund, by email. “When worker retirement security is at stake, we can’t afford to have this level of misinformation out there, spread by dark-money influence groups and private interests of the fossil fuel industry.”
The Americans for Financial Reform Education Fund intends the platform to counteract anti-ESG campaigns, Renta says.
“All the people and interests that are pushing disinformation campaigns are going to be all-in next year, trying to jeopardize retirement security and sensible investing, with all sorts of measures at the state and federal levels,” Renta says. “We have to get ahead of that.”
The Americans for Financial Reform Education Fund is a coalition of more than 200 state and national, labor, election and policy organizations. Take on Wall Street, a coalition of groups dedicated to building greater equity into the financial system, including unions and other public policy-focused organizations, was launched by the Americans for Financial Reform Education Fund in 2016.
New York Governor Kathy Hochul signed State Senate Bill S6962 on Monday, requiring new and existing New York City Board of Education Retirement System-eligible employees to be automatically enrolled into the BERS plan.
Under current law, certain eligible BERS employees, including provisional employees in competitive or labor class titles and employees in non-competitive and exempt class titles, have the option of joining BERS by filing an application for membership at any time during employment with a BERS-participating employer.
Current part-time workers, temporary workers and employees not required to take a civil service exam are in a category of workers only allowed optional enrollment.
Although the law requires employers to notify workers of their optional eligibility at the time of employment, these workers often continue to work for many years without actually enrolling in the retirement plan, as a result missing years’ worth of benefits and the financial security those benefits would have provided in retirement, according to the bill.
The bill, which amends Section 2575 of the Education Law, is sponsored by State Senator Robert Jackson, and co-sponsored by State Senator Zellnor Myrie. The auto-enrollment of new employees will begin on July 1, 2024.
An initial opt-out period, for current covered employees, will run from July 1, 2024 until September 30, 2024. After this, implementation will continue on a rolling basis each time new covered employees are hired. New employees are offered a 90-day window to opt out and, if they do not, will be enrolled at the end of that window.
Expanding Retirement Security
Earlier versions of the bill were vetoed in 2019, 2021 and 2022, according to Alexander Kazazis, general counsel at NYC BERS, representing BERS management and Sanford Rich, BERS’ executive director.
“BERS welcomes this legislation as a major step forward in the retirement security of covered employees,” Kazazis says in an emailed response. “Many employees fail to join the retirement system not due to a deliberate decision, but because they did not realize that an affirmative election was required. BERS management believes that this will be very beneficial for these employees, while still reserving for any employees who do not wish to join the ability to opt out.”
Kazazis adds that the opportunity to participate in BERS, a defined benefit pension plan, is a “very valuable benefit in today’s job market,” as these plans are increasingly uncommon. He said BERS membership also includes disability retirement coverage and a death benefit of up to three years of pay.
He also noted that the group of employees covered by the change includes some of the city’s lowest-compensated employees, such as school lunch helpers and school crossing guards, who have less capacity to independently save for retirement.
This bill does not create a new class of retirement system members; rather, it adjusts the timetable for enrollment. It only applies to full-time and part-time employees—not provisional employees.
The bill stated that under the current optional rules, only 55% of eligible employees eventually join BERS. Of those who have not elected to enroll in the plan, approximately 71% are female, with an average age of 36.6 years old, an average salary of approximately $31,800 and an average tenure of 4.5 years.
“It is not unusual to learn the story of many employees who each day provide vital public services alongside coworkers who are covered by a full pension only to discover, after many years on the job, that they missed their opportunity to enroll and end up losing time-earned pension benefits when they register many years after entering the system,” sponsors of the bill stated. “It is unjust that due to a lack of awareness, benefits deriving from years of public service are stolen away from employees that have dedicated their lives to the state and local governments.”
Sponsors of the bill argued that by allowing for automatic enrollment, unless a worker affirmatively opts out, all eligible workers will be provided the opportunity to benefit from their retirement as intended.
Matthew Petersen, executive director of NAGDCA, says via email that the situation “provides a perfect example of the impact of automatic features in any retirement plan.”
“Almost half of the eligible population in this example didn’t opt into their retirement system, even though many obviously wanted to be a part of it,” Petersen says.
