New York, NY – A growing number of Americans have no retirement income other than social security. In New York State almost 4 million lack either a pension or 401K plan. Its estimated that 55 million Americans are lacking a retirement plan at work.
With a growing number of retirement programs lacking for Americans, 40 states are considering legislation establishing state-facilitated retirement programs for private-sector workers.
In New York State, Governor Andrew Cuomo proposed in his 2018 budget, the establishment of a state-wide modified retirement plan. The program would have a state board overseeing investments made through payroll deduction with no employer contributibutions. The Governor’s recommendation is awaiting action in the Legislature. Participation by businesses would be voluntary in New York.
Five states including California, Connecticut, Illinois, Maryland and Oregon, mandate that companies meeting a certain size threshold automatically enroll all employees. California, where a program administered by a state board will automatically enroll nearly 7 million workers starting in 2019. However, mandated state-run retirement savings plans have gotten pushback from businesses and Congressional Republicans.
The Treasury Department said the myRA program, launched in late 2015 for people without access to a 401(k) or other workplace retirement plan, had about 20,000 funded accounts with an average of $1,500. Programs like these should be expanded. Inspite of a growing need for additional income to those over 60 years old, President Donald Trump signed legislation revoking an Obama-era Labor Department rule designed to provide a legal safe haven for the state retirement programs.
With pensions disappearing from the world of work, and social security payout insuffient to prevent poverty for seniors, the need for a national retirement system is critical.