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Compliance November 14, 2014
NYC Public Advocate Pitches Private Pension System
Letitia James, New York City’s public advocate, is readying legislation that would create a board tasked with studying and establishing a centrally pooled pension fund for the city's private sector.
Reported by Jill Cornfield
“Too many people have too little savings, and no access to quality retirement planning,” James said in a recent statement. Citing figures from a New School study, James said the percentage of New York City workers participating in a workplace-based retirement plan dropped by 17% between 2001 and 2011. The data also found just 12% of New Yorkers in that same time frame had access to a defined benefit (DB) plan.
James said she will introduce a bill in City Council that would amend the city’s administrative code and establish a Private Pension Advisory Board. A seven-member board would work with business, labor and academic leaders in the city to study the best way to establish a pension fund for private-sector city workers, and make specific recommendations to the mayor, City Council, the comptroller, the public advocate and borough presidents. The retirement fund, intended to be up and running by 2030, would be open to all private-sector New York workers without access to a pension.
“Such a retirement fund could offer investment, accumulation, wealth and annuity advantages with many similar benefits to well-managed public employee retirement systems in New York City and State,” James said, citing secure savings with lower fees and higher returns than 401(k) plans. “The average New Yorker without a defined benefit retirement plan at work is saving only 54% of the money they will need for retirement.”
James called out the plight of retired elderly residents purely dependent on social and government programs, saying the status quo would not allow the city to flourish. The expansion of retirement programs would be one of the most meaningful measures New York can take to keep working families in the city, she said, pledging to continue working with business interests to create innovative but realistic ideas.
“Every New Yorker must have access to a safe and secure pension by 2030,” James said. “This goal can only happen with the cooperation of employers, labor and government working together.”