New York State moved one step closer to an auto IRA system for private-sector workers this week as the Senate passed a bill to amend the forthcoming program.
On Monday, the Senate approved legislation passed in May by the state assembly that would require businesses to participate in the state’s individual retirement account program and automatically enroll workers, unless the businesses already provide a retirement plan. The versions of the bill are being reconciled in the state legislature before being sent to Gov. Andrew Cuomo for his signature.
Under the bill, businesses in the state that have been operating for at least two years and have at least 10 employees would be required to participate. In 2018, the state passed legislation to establish a voluntary IRA system for the private sector, but it has yet to implement that program.
The state appears to have been prodded into action by New York City’s passage of an auto IRA program. However, the city’s program would be absorbed by the state program — a provision in the city’s legislation requires as much, as long as the state system is similar and automatic.
Pending Cuomo’s approval, New York state’s program would be latest of a handful of auto IRA initiatives in the U.S. Given the size of the state’s population, it could also end up being one of the biggest.
One of the few auto IRA programs that is up and running, California’s CalSavers, has gained 11,000 participating employers, representing 350,000 workers and about $78 million in assets, since it launched statewide in July 2019, according to figures from the state. At the end of June, CalSavers will begin requiring all businesses with at least 50 employees to register, unless they already provide retirement plans.
Other states, including Illinois and Oregon, also have automatic IRA programs for private-sector workers.
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