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AARP argues for senior saving plan
AARP argues for senior saving plan
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As AARP New York officials and volunteers visited the offices of Rochester’s elected officials Tuesday, state legislators in Albany were giving their stamp of approval to the retirement proposal AARP was lauding.
The voluntary Secure Choice Savings Program is a program for employers and employees that provides a cost-effective solution to help staffers save for retirement. Secure Choice would allow companies that do not provide their employees a retirement savings option the chance to do so with a payroll-deduction Roth IRA.
More than 3.5 million private-sector employees in New York work for a company that does not offer a pension, 401(k) or retirement savings option.
“One of our big priorities is making sure people have the ability to be financially secure in retirement and be able to prepare for their future,” said AARP’s Associate State Director Joe Stelling in a meeting with staff from Sen. Joe Robach’s, R-Greece, office. “Secure Choice is a tool that we want to make sure small businesses have at their disposal.”
The bill would allow the state Deferred Compensation Board, which administers a 457(b) retirement plan for public-sector employees, to design, administer and oversee a retirement savings plan for private-sector employees.
The cost of the plan would be covered through an administrative service fee on the investments made by enrollees capped at 0.75 percent of the total investments.
“State legislators’ support for an initiative to help New Yorkers save for retirement at work signals an impending game-changer that could potentially benefit millions of private sector employees,” said AARP state Director Beth Finkel.
People are 15 times more likely to save if they can do it through their paycheck, Stelling said.
“That’s why this is a key,” he said, noting the plan’s portability from one employer to another. “It’s not mandatory for them, but they can opt in.”
Nearly three-quarters of small businesses that don’t provide their employees a retirement savings option say they probably would offer Secure Choice if it becomes available, Stelling said.
“It’s another benefit they can offer employees without fiduciary responsibility,” he added.
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