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Good Morning

It’s time to rethink retirement savings

Of the 401 Long Islanders surveyed by the

Of the 401 Long Islanders surveyed by the AARP, 28 percent said they do not feel confident that they will ever be able to retire. Credit: iStock

Once upon a time, there was a world where we’d stay in one job for decades, pensions were the norm and retirement savings weren’t a source of worry. That time has long since passed.

Now, we’re struggling, often hopping from job to job, trying to pay the rent and credit card bills, and, in many cases, not getting a pension — or even a 401(k).

We lack stability and certainty. Whenever we do think about retirement, too often it’s a distant, seemingly unattainable dream. More than half of New York State private sector workers don’t have access to an employer-sponsored retirement plan, according to AARP.

It’s time to rethink. New York must adapt to its changing employer base and workforce. A broader strategy that helps workers across the state put away money toward retirement must be considered.

Gov. Andrew M. Cuomo has appointed SUNY Chairman and former state Comptroller H. Carl McCall to head a commission to study the possibility of a state-organized retirement plan for private sector employees. Mayor Bill de Blasio has proposed a similar concept for New York City, with more details. Anyone who works in a city business with 10 employees or more could qualify. Employees of companies that don’t have retirement savings programs would be automatically enrolled in individual retirement accounts, and they’d have the ability to opt out or change their contribution rates. An independent board would oversee and manage the program.

It’s a relatively simple but critically important idea, one that other states are considering. Hopefully, if it succeeds, it’ll spread across the country.

There’s one snag. Right now, federal law governing pensions, known as the Employee Retirement Income Security Act, or ERISA, contains complex guidelines, and places significant liability standards and other requirements on employers and plan organizers. For states and cities, that could be a deal-breaker. So last year, the U.S. Department of Labor proposed a rule change to exempt state-run plans from ERISA. It’s winding its way through an approval process.

Federal officials should finalize the change and extend it to large cities, too. And since the sooner people start saving, the better, McCall and his commission should work speedily, so the state can develop a program that benefits employees across Long Island and beyond. State officials might be able to glean some ideas and strategies from the city’s existing proposals. Any program must be comprehensive, transparent and well-managed, with a diversity of options. The automatic enrollment is necessary to be as wide-reaching as possible, but everyone also must be made aware of the ability to opt out. It’s important that the state makes sure every eligible worker gets the proper paperwork and ample education along the way. Employees must understand the risks — and the rewards — and it’ll be up to the state to create and maintain a program that’s well-advertised and clearly communicated.

But this must be a priority, and it’ll be up to Cuomo and McCall to make it happen. If done well, this could transform the financial future of individuals, families and the state as a whole. — The editorial board