NEW YORK (Reuters) - New York City’s mayor Bill de Blasio will call for a city-run retirement system for private sector employees in his annual keynote address on Thursday.
De Blasio, a Democrat, will reveal that he wants the city to become the first in the country to offer a retirement system to private employees. While better paid jobs offer individual savings plans, they are not always on offer to lower income workers.
U.S. towns, cities, and states offer retirement plans for public workers that offer a defined level of benefits. New York City manages about $160 billion in its public pension funds for teachers, police, firefighters and other city workers.
Some states have already started looking at introducing plans for private sector workers, leveraging the extensive infrastructure, know-how, and cost benefits they have acquired in running plans for public employees.
Company pension plans have largely been replaced with savings plans that do not offer guaranteed retirement income. Workers frequently do not save enough and those at the lower end of the income spectrum are particularly impacted.
City officials cited startling figures. Only 43 percent of working New Yorkers have access to a retirement plan, they said. Around 40 percent of New Yorkers between the ages of 50 and 64 have less than $10,000 saved for retirement.
The mayor’s plan would allow any New Yorker working at a business with ten or more employees to automatically enroll in an employee-funded retirement plan.
The initiative from de Blasio is a continuation of his policy of improving lives for lower income New Yorkers. He has championed increasing the minimum wage to $15 per hour and introducing parental and sick leave.
Reporting by Edward Krudy; Editing by Bernard Orr