Two thirds (68 percent) of New York small businesses want the state to establish an “easy, effective and inexpensive” way for their employees to save, with many companies saying they can’t afford to offer retirement-savings plans on their own.
That’s the finding of a telephone survey of 451 owners or decision makers of New York companies with nine to 100 employees that AARP New York released Dec. 20.
The survey found 68 percent support (40 percent “strongly”) legislation to establish a basic, privately-managed, ready-to-go retirement-savings plan for their employees that the state would administer.
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In addition, 80 percent think state lawmakers should support a plan to make it easier for small-business owners to offer a way to save for retirement to their employees, with 56 percent strongly agreeing.
It also found 68 percent of those who do not offer a retirement-savings plan for their employees cited “excessive cost” as an obstacle, more than how complicated or time consuming it would be.
Poll respondents were evenly divided among Republicans and Democrats at 24 percent each, with 18 percent identifying themselves as independent.
Additionally, a “wide-ranging array” of organizations signed on to a letter urging Gov. Andrew Cuomo to propose a state-administered workplace retirement savings option as part of his 2017-18 state budget proposal this month.
Explaining the need
More than half of all private-sector employees in New York “lack access” to a pension or 401(k) at work as fewer employers are able to offer such benefits, the AARP said.
The statistic includes more than 60 percent of Millennials and 67 percent of Hispanics, the organization contends.
That represents more than 3.5 million people, according to AARP’s Public Policy Institute, and as many as 4.7 million, according to the Nelson A. Rockefeller Institute of Government.
The Rockefeller figure is based on calculations by the Center for Retirement Research using U.S. Census Bureau data. The Albany–based Rockefeller Institute of Government is the public-policy research arm of the State University of New York.
AARP notes that Americans are 15 times more likely to save for retirement if they have access to employer-sponsored plans, according to its news release.
An automatic payroll-deduction option is “key to empowering” New Yorkers to save for a secure financial future and retirement, and lessen their dependence on public assistance, AARP contends.
Push for Cuomo proposal
As the governor’s Saving More to Achieve Richer Tomorrows (SMART) Commission prepares to issue recommendations on how to address the state’s retirement-savings “crisis,” AARP and others are urging him to propose the kind of auto-enrollment plan “favored by most small businesses.”
“AARP New York urges Gov. Cuomo to help small businesses and millions of mostly middle class, private-sector workers in New York by providing this effective way for employees to save their own money and create a financially secure future,” Beth Finkel, AARP New York State director and SMART Commission member, said in the organization’s news release.
One area state lawmaker and small-business owner also expressed his support for the proposal.
“This would cost businesses next to nothing and would provide a great benefit not only to those companies that can’t afford to offer retirement savings plans but to their employees as well,” New York State Assemblyman Gary Finch (R–Springport) said in the same release. “And attracting and keeping good employees is the key to any business’s success.”
Finch operates a small funeral home and provides his employees with a retirement-savings plan, AARP said.