On May 11, 2021, NYC Mayor Bill de Blasio signed into law the Retirement Security for All Act which establishes a retirement savings program for private sector employers that (A) have not offered a retirement plan within the preceding two years and (B) employ five or more employees. By doing so, NYC joins 13 states and two cities that have adopted some form of retirement savings program.
Under the legislation, eligible employees will be defaulted into a 5% employee contribution, which employees can opt out of at any time (or adjust down or up subject to the annual Federal IRA maximum). Eligible employees are defined as those who are at least age 21 and work at least 20 hours a week. Accounts will be portable, allowing employees to roll over their accounts into other retirement plans when they switch jobs. Covered employers will not be required to contribute on behalf of employees. However, they will be required (A) to enroll each of their covered employees in the program, (B) to remit funds deducted from the earnings of each participant for deposit in the program, and (C) to distribute program information to employees.
The law also establishes a retirement savings board ("Board") to facilitate implementation and oversee the program. The Board’s powers will include determining the start date of the program, entering into contracts with financial institutions and administrators, creating a process for participation, and conducting education and outreach to employers and employees. The Board will work with the NYC Comptroller to select appropriate investment strategies and policies.
The legislation is scheduled to take effect in 90 days, but the Board will have up to two years to implement the program.
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