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After Rally with De Blasio, City Council Hears Bills on Private Sector Retirement Security


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De Blasio, Council members, AARP members & others rally (photo: Michael Appleton/Mayor's Office)


Just days after he ended his presidential campaign that was focused on issues affecting working people, Mayor Bill de Blasio rallied with AARP volunteers and City Council Members at City Hall on Monday to push for a proposal that could help millions of New York workers save for their futures.

The Retirement Security for All proposal, which de Blasio first raised three years ago and then again in his State of the City speech this year, would establish a retirement savings program for private-sector employees whose employers do not currently provide those options, and a city government board to oversee its implementation.

There are two bills in the legislative package that would create the system and the board and sponsored by Council Members I. Daneek Miller and Ben Kallos, who led a hearing on the proposal shortly after the Monday morning rally.

“You should not have to work until you die,” de Blasio said at the rally. “You should be able to enjoy the fruits of your labor. You should be able to have some time in your life when you retire with dignity.”

The mayor said that 40% of New Yorkers aged 50-64 have less than $10,000 saved for when they retire.

At the hearing of the Council’s Committee on Civil Service and Labor, chaired by Miller, there was broad support for the legislation as well as opposition from some who raised concerns about the administrative burdens the program could place on employers and small businesses.

Kallos’ bill would mandate that businesses with ten or more employees automatically enroll their workers in individual retirement accounts, while giving them the option to opt out. The retirement plans would be funded only through employee payroll deductions, at a default rate of 3% of income, though employees would be allowed to choose a higher or lower rate.

Miller’s bill creates a board of mayoral appointees to oversee the implementation of the program, which would likely hire an outside firm to manage the retirement plans and charge low fees to make the programs affordable and attractive to employees.

The bills are a solution to a stark problem. Testifying on behalf of the de Blasio administration was John Adler, the director of the Mayor’s Office of Pensions and Investments, who reiterated the data point that 40% of New Yorkers aged 50-64 have less than $10,000 saved for when they retire. Out of the roughly 3.5 million private sector employees in the city, only about 41% have access to an employer-sponsored retirement plan, down from 49% ten years ago, Adler said, citing a report from The New School’s Schwartz Center for Economic Policy Analysis.

“This program has the potential to significantly reduce future poverty among retirees in New York City,” Adler said in his opening remarks at the Council hearing, “and take an important step towards helping over a million New Yorkers maintain or improve their standard of living when they stop working.”

The proposal is also similar to programs that have already launched in California, Illinois, and Oregon, and following their lead would allow New York City to avoid any hiccups in implementation, he said. De Blasio estimated earlier that the city’s management of the programs would cost between $1.5 to $3 million each year for the first three years, and that the program would eventually be self-funded through fees on the investments made by the retirement plans.

Though New York State passed a measure last year to allow employers to create voluntary retirement savings plan, there has been little movement on that front. Adler said that program, which is an opt-in rather than an opt-out plan, would likely fail to expand access like the city’s proposal.

“We don’t think that we should be waiting for the whims of Albany to possibly change or strengthen their plan,” he said. “We have a crisis now in New York City...and frankly every month that we wait is an opportunity that’s lost for workers to begin saving for their own retirement.”

Adler also recommended that Kallos’ bill be amended to establish a 5% default contribution rate, insisting that it does not discourage participation as is evident from other jurisdictions with similar programs.

The mayor’s push for the retirement security proposal in 2016 died soon after because of the Republican-led Congress, which struck down an Obama-era rule by the Department of Labor that explicitly allowed municipalities to create private sector retirement programs. But that Republican measure did not change the underlying federal retirement law, which Adler said still allows the city to move forward. That’s why other states have been able to legally create their own retirement savings programs, he said.

The two bills have limited support so far from other Council members, at least as far as co-sponsorship goes. Kallos’ bill has five other sponsors besides him and Miller, while Miller’s bill has four other co-sponsors. But Kallos seems confident that the bills will advance quickly, particularly with the mayor’s backing. At Monday’s hearing, Council Member Andy King also said he would sign on to the legislative package. The bills have no timeline for passage but the mayor’s office, in a release sent out Monday afternoon, estimated that the program would be launched by the end of 2021, when de Blasio and most of the City Council will be leaving their current posts due to term limits.

Experts and researchers who testified at Monday’s hearing recommended several measures to ensure that the city’s program is a success. Caroline Crawford, assistant director of state and local research at the Center for Retirement Research at Boston College, said “three criteria are essential to success” of the program – a mandate to ensure employer participation, minimizing opt-out behavior and an adequate default contribution rate.

Representatives of the Communication Workers of America and AFL-CIO also supported the bills at Monday’s hearing.

A crucial mover behind the proposal has been the AARP, which first rallied with the mayor for Retirement Security for All in 2016. Beth Finkel, state director of AARP New York, noted that employees were 15 times more likely to start saving money if offered a retirement program by their employer. Finkel also urged the Council members to strengthen the proposal, by expanding the mandate to employers with five or more employees and to establish a 5% default  contribution rate.

“New York City is the greatest city in the world but it is also an expensive city and we know Social Security alone is not enough to retire on alone,” she said.

There was some pushback against the bills. Aliya Robinson, senior vice president of Retirement & Compensation Policy at the ERISA Industry Committee, brought up concerns about how the legislation may affect existing retirement programs. Robinson urged changes to Kallos’ bill, including completely excluding all employers that provide a retirement plan under the Employee Retirement Income Security Act of 1974, setting restrictions on eligibility based on age and number of hours worked as established by the ERISA law, and exemptions without reporting requirements for employers similar to programs in Oregon and Illinois.

Alison Wielobob, general counsel of the American Retirement Association, similarly echoed Robinson’s testimony. She said the bills would “would place undue complexity and burdens on employers by imposing a set of rules that parallel the extensive and effective set of federal rules that already apply to workplace retirement plans.”

Andrew Rigie, executive director of the New York City Hospitality Alliance, also warned that the bill could violate the ERISA law, despite other jurisdictions having faced no legal challenges yet, and cited anecdotal comments from the restaurant industry to insist that tipped workers with small paychecks will be hesitant to participate. He also raised the spectre of complications for businesses that employ undocumented workers.

But there was ample testimony that indicated those concerns were largely unfounded or insufficient to not act.

Rick McGahey, senior fellow at The New School’s Schwartz Center for Economic Policy Analysis, said a failure to act could mean that by 2026, about 825,000 middle class workers in the state could face poverty at retirement – half of those workers live in the city.

Michele Evermore, senior researcher and policy analyst at the National Employment Law Project, spoke of the racial wealth gap that persists into retirement, and the need to address it through any means necessary, including a retirement security program.

And Angela Antonelli, research professor and executive director of the Center for Retirement Initiatives at the McCourt School of Public Policy at Georgetown University, laid out multiple benefits of New York City creating an automatic enrollment retirement savings program – it would help millions of workers save money and be more mobile, make small businesses more competitive, help gig economy workers, benefit underserved populations, reduce burdens on state and federal budgets, and create a model for other states, among other positive impacts.

Michael Parker, executive director at the Oregon Savings Network, which was the first-of-its-kind plan when it launched two years ago, touted the success of the state’s program in testimony via video conference. He said about 50,000 new retirement accounts had been established, worth about $30 million saved, with the rollout continuing. The program’s participation rate is holding steady at about 72%, he said, meeting projections. “By not having compliance at the beginning, we sort of set up a culture of noncompliance instead of the other way around,” he said.

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by Samar Khurshid, senior reporter, Gotham Gazette
     

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What's The [DATA] Point? 90%, The City's Initial Progress on 'NYCHA 2.0'


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What's The [Data] Point? Episode 80 -- 90%, The City's Initial Progress on 'NYCHA 2.0' - with Sean Campion of CBC [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

sean campion wtdpMayor de Blasio launched a new "NYCHA 2.0" plan in December 2018, with initiatives to help the struggling public housing authority bring in roughly $25 billion over the next 10 years to address its $30-plus billion worth of physical needs. How is NYCHA 2.0 progressing so far? Citizens Budget Commission's Sean Campion has written a new report and joined the podcast to discuss it.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

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Push Launched to Get Voters to Choose Ranked-Choice Voting


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(photo: @commoncauseny)


A coalition of elected officials, business and labor leaders, and reform groups gathered Thursday in Lower Manhattan to launch a campaign to convince New York City voters to change the way they elect their representatives in city government.

Voters in New York City this fall will have the opportunity to approve ballot referenda on a number of reforms to the City Charter, including a new election system known as “ranked-choice voting.” The new system would allow voters in primary and special elections -- but not general elections -- to rank up to five candidates on the ballot rather than choosing just one, which advocates say will force candidates to reach a larger base, eliminate so-called “spoiler” candidates, ensure winners have a broad mandate, and save the city millions in costly runoff elections.

The coalition, Rank the Vote, which formed to promote the new voting method, held a press conference on the steps of Federal Hall Thursday morning, just over six weeks from this year’s Election Day, which is Tuesday, November 5. Speakers discussed the possibility of overhauling city elections and what they believe is the importance of voting yes on the ranked-choice voting ballot referendum, which will be the first of the five charter revision questions on the ballot.

“Ranked-choice voting is a system that will help voters choose the candidate who has the broadest base of support, because all too frequently what we find is that the winner in these crowded fields is chosen with much less than a 50 percent majority,” said Susan Lerner of Common Cause New York, as she kicked off the press conference. “It’s not as healthy for our democracy as it needs to be.”

Ranked-choice voting is in effect in a few cities like San Francisco, Minneapolis, and Santa Fe, and Maine is projected to use the method in the upcoming presidential elections. Under a ranked-choice voting system, voters choose candidates in order of preference. If no candidate wins a majority of votes on the first count, the candidate with the least support is eliminated and ballots for them are redistributed to their voters’ second choices. That process is continued until a candidate crosses the threshold need to win the seat.

The proposal before New Yorkers this year allows voters to rank up to five candidates in primary and special elections, and requires the winner to receive more than 50 percent of votes. Democratic primaries in New York City can be especially crowded, with citywide elections prone to possible run-offs between the top two candidates if neither reaches 40 percent initially, and down-ballot races won by candidates with relatively small pluralities.

The referendum is one of 19 placed on the ballot in five yes or no questions by the city’s 2019 Charter Revision Commission. The body -- with representatives appointed by the mayor, City Council, public advocate, city comptroller, and five borough presidents -- was responsible for examining the entire City Charter and putting amendments on the ballot to be voted on by the electorate.

Speaking Thursday morning were players from across the city’s political spectrum, including Public Advocate Jumaane Williams, a Democrat, and Kathy Wylde, president of the Partnership for New York City, which represents the city’s business community. Also speaking were Manhattan Borough President Gale Brewer, Bertha Lewis of the Black Institute, and Maya Wiley, Senior Vice President for Social Justice at the New School.

Assembly Member Ron Kim and Council Member Brad Lander made remarks, as did representatives from New Kings Democrats, Amplify Her, and New York Communities for Change. Labor unions like RWDSU and CWA, and good government groups like Citizens Union and Lerner’s Common Cause NY are also members of the coalition.

Ranked-choice voting, also known as “instant-runoff voting,” would replace the current voting system in city primary and special elections, which for citywide elections requires candidates to win 40 percent of the vote; if no candidate reaches the 40 percent threshold a runoff election is triggered -- a separate election in which only the highest two vote-earning candidates face off again.

“As someone who ran for Citywide office and participated in a runoff election, I know from personal experience that Ranked Choice Voting is necessary for New York,” said Betsy Gotbaum, the former public advocate and currently executive director of Citizens Union, in a statement. “Ranked Choice Voting will foster more positive, issue-focused campaigns, give voters more choice, ensure that elected officials are accountable to a broader spectrum of their constituents and avoid costly, time consuming and unnecessary runoff elections.”

The advocates say ranked-choice voting strengthens the concept of majority rule by ensuring the winner is receives more than 50 percent of the vote and requiring candidates to seek support beyond their base.

Brewer said it is important in a city as diverse as New York for voters to be able to express a range of choices in multifaceted campaigns. “If you’re running city-wide, you don’t just go to ten districts...you got to go to all the districts, you have to talk to everyone, you got to have a conversation,” she said.

“I am tired of people winning with 28 percent of the vote,” said Lewis, likely referencing borough president and City Council races, where there are no runoffs and candidates often win all-important Democratic primaries with low percentages in crowded races.

Supporters also say ranked-choice voting encourages turnout and can help "minority candidates" win. Alice Nascimento spoke for New York Communities for Change, which organizes low- and moderate-income families for political action. “When we talk to them about voting a number of times they say my vote doesn’t matter, there are too many candidates,” she said, referring to the constituents she works with.

The city Campaign Finance Board anticipates an astounding 500 candidates to be running for city office in 2021, when most City Council seats, four of five borough president positions, and two of three citywide positions, including mayor, will be wide open due to term limits. Because many of those races are likely to have several candidates, it’s likely that no candidate will receive more than 40 percent of vote in many races.

“Nobody’s going to know all of those candidates, and we really have to put the burden on candidates to get out beyond their core, base group and get to know what the issues are for the broader constituency,” said Wylde of the Partnership for New York City.

“And business issues aren’t frankly being very well represented these days, and we think this is a shot at getting them better represented in the public dialogue,” she added.

New York has one of the lowest voter turnout rates in the country and that is likely to be worse in the “off-year” elections of 2019, when only two major races are taking place (a public advocate special election and the Queens district attorney election). This means few New Yorkers are likely to turn out to decide the charter revision proposals.

Asked whether fundamental voting methods should be decided by a small fraction of eligible voters, Council Member Lander acknowledged the scenario was not ideal, but that passing ranked-choice voting by referendum in 2019 is the best option the city has.

“I’m confident this would win in a high turnout election. Charter revision commissions are timed when they are timed, so we have to move forward now,” Lander told Gotham Gazette after the press conference.

“And the charter revision process was very inclusive of a lot of people. Lots of communities, I think, were consulted in it and really had an active voice,” added Cynthia Richie Terrell, executive director of Represent Women.

Questions remain about how the public will be informed about the changes to city elections, should ranked-choice voting be approved this fall. “There’s going to be a learning curve...It’s very difficult. We have to find more creative ways, obviously, to get the information out. Those creative ways also cost money,” Public Advocate Williams told Gotham Gazette.

The city Board of Elections has been criticized for the low level of voter education and public engagement it has undertaken in the past. “Hopefully when people get to Election Day they’ll be given better instructions than they’ve been given in the past about what’s going on. But I think we’ll learn together and with any new system, the more we use it the more people are going to get used to it,” Williams said.

Lerner, speaking on behalf of Rank the Vote, which has a 501(c)4 registered with the Board of Elections for political activity, told Gotham Gazette, “There is confidence in a broad coalition of New Yorkers -- civic organizations, labor unions, engaged citizens -- who are going to take the message out.”

“If the voters adopt this we will absolutely be working with the city, with the board, but we are not going to rely just on the Board of Elections,” she added.

Ranked-choice voting will be part of the first question on the ballot this fall. Voters will be able to weigh-in during the nine-day early voting period from October 26 to November 3, or on Election Day, November 5.

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by Ethan Geringer-Sameth, reporter, Gotham Gazette
     

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Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.


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