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A wise idea to help New York private-sector employees save

Without such a plan, many don’t save on their own. Now, because of a new state program, they might have a chance to start.

The road to retirement may be easier because

The road to retirement may be easier because of a proposed state savings program. Photo Credit: iStock

Have you saved — at all — for retirement? Have you thought about it?

If you haven’t, you’re not alone.

More than half of New York’s private-sector workers — about 3.5 million people — don’t have access to an employer-sponsored 401(k), according to AARP. Without such a plan, many don’t save on their own.

Now, if a proposed state program is adopted, they might have a chance to start.

Gov. Andrew M. Cuomo has included a retirement savings program called Secure Choice in his 2018-19 budget. The program would be used by employers who don’t offer a 401(k) or similar savings plan. Employees would be able to contribute from their paychecks, probably to a Roth individual retirement account. A professional financial firm chosen by state officials would manage the investments.

It took two years since the state first formed a task force on the issue, but the Secure Choice proposal now addresses the clear need. The plan is palatable to the business community because it’s voluntary for employers, who would have no liability and make no matching contributions. An AARP survey found that of 200 small-business owners who don’t offer plans, nearly 75 percent would do so if the state facilitated an option. For them, the program could provide a competitive advantage to attract good workers. Employer participation is critical.

The governor’s proposal leaves open whether workers would opt in or whether they would be enrolled automatically. Automatic enrollment, with a well-explained opt-out provision, is the best way.

State lawmakers should insist this program be included in the final budget. Help New Yorkers save now so they will be far more secure later.