Comptroller Scott Stringer Releases New Retirement Savings Plan for New York City

On October 6, 2016, New York City Comptroller Scott M. Stringer released two reports outlining the scope of the retirement security challenges facing his city’s private sector workers, the range of options for consideration and a proposed plan to address them.  These reports represent 18 months of work by the Retirement Security Study Group established by the Comptroller in 2015.

View the Comptroller’s reports released on October 6, 2016:

1) An Analysis of Options to Increase Retirement Security for New Yorkers by the Retirement Security Study Group

Summary Highlights Taken From the Report:

  • 1.5 million, or 58 percent, of NYC’s private sector workers between the ages of 25 and 64 are uncovered and/or ineligible for a 401(k) or other retirement plan through their employers or businesses (p. 5).
  • All study group members supported the objectives outlined at the outset of this report, intending to overcome impediments to New York City employers offering every worker access to a workplace retirement savings plan. The goals include a simple plan structure with low fees; broad employee participation in the plan; predictable lifetime income stream; minimal employer administrative and cost burdens; promote competition and choice in order to maximize quality and minimize cost; transparency and objectivity in the selection of private sector operators; and no liability for New York City taxpayers (p. 41 & p. 7).
  • All study group members supported the notion of a mandate requiring that all employers who do not currently offer an IRA or 401(k) plan must offer their workers some type of auto-enrollment IRA, although not necessarily a plan offered by the city. Such plans would permit individual employee opt-outs (p. 41).
  • All study group members supported using myRA as a starter plan for individuals with low balances (p.41).
  • The majority of the study group members supported a hybrid solution of a mandatory publicly-enabled IRA combined with a 401(k) plan marketplace and a publicly-sponsored Open MEP 401(k) plan (p.41).

2) The New York City Nest Egg Report by the Office of New York City Comptroller Scott M. Stringer

Summary Highlights Taken From the Report (pp. 6-7):

  1. Employers that currently offer a workplace retirement plan would be free to continue doing so.
  2. Employers that do not offer a retirement plan but would like to, would be able to shop for plans through a curated marketplace overseen by an independent board. To help employers for whom the time and effort of conducting a search for a plan is a barrier in selecting one, a new, voluntary NYC 401(k) Marketplace would offer ready access to a set of screened, employer-sponsored, easier-to-use “prototype” 401(k) plans. These offerings would include a new publicly-sponsored Empire City 401(k) Multiple Employer Plan (MEP), and potentially SEP-IRA and SIMPLE-IRA plans. The 401(k) prototype plans provide ERISA protections to employees, and would allow the employer to automatically enroll employees.
  3. Employers that want to offer a 401(k) plan but are concerned about ERISA fiduciary responsibilities and paperwork associated with individually sponsoring a plan would be able to select a voluntary publicly-sponsored “turn-key” product in the new NYC 401(k) Marketplace, the Empire City 401(k) MEP.
  4. Employers that do not select a plan on their own or through the NYC 401(k) Marketplace would default into the new NYC Roth IRA. Employees would be free to opt out at any time.