A New Frontier for Saving for Retirement? The Creation of State Retirement Savings Marketplaces

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March 23, 2018

Urška Klančnik
Jim Malatras
Brian Backstrom



The ever-changing landscape of employer-based benefits has created challenges for policymakers concerned — and rightly so — about dwindling access for employees to retirement savings programs. In 2016, New York Governor Andrew Cuomo created the Saving More to Achieve Richer Tomorrows (SMART) Commission to analyze ways to increase access for private-sector employees to retirement savings plans. First chaired by State University of New York (SUNY) Board of Trustees Chairman and former State Comptroller H. Carl McCall, and then by former State Budget Director Mary Beth Labate, the commission consisted of a diverse group of consumer, business, and policy experts. The Rockefeller Institute of Government provided technical research and policy assistance.

Based in part on the work of the SMART Commission, the governor’s 2018 New York State Executive Budget included a proposal to create the New York State Secure Choice Savings Program (Secure Choice), a state-facilitated voluntary retirement savings account program for private-sector workers not enrolled in a retirement plan. The state Deferred Compensation Board (Board) would create and administer this program, which would offer several savings account options and create a main online portal marketplace for participating employees to use to manage their accounts. All expenses of the Board would be covered by the New York State Secure Choice Administrative Fund.

Participation in the Secure Choice program would be voluntary for employers as well as employees. If a private-sector employer decides to participate, its employees would be enrolled in a Roth IRA (individual retirement account) and automatic contributions from employees’ payroll checks would be established, though any employee can opt out either initially or at any time. Employers do not make contributions to employees’ retirement accounts, and all employees’ savings are portable, meaning they can take them from one job to the next.

In early 2018, both houses of the state legislature included modified versions of the program in their budget resolutions, so the concept has received broad and bipartisan support and appears well-positioned to be enacted in New York.

Will a program such as Secure Choice benefit private-sector workers? We found that even a voluntary program will likely reduce the number of New Yorkers without any retirement savings. We explore these issues in more detail below.

Read the full report.