The New York state Assembly passed a bill to create a mandatory automatic-IRA program for private-sector companies that don't offer a retirement plan.
The bill, which was passed May 11 by a vote of 125-22, ensures that employees are automatically enrolled into the Secure Choice Savings program. Employees who don't want to participate in the program would have to opt out.
A memo attached to the bill cited a 2012 study from Aon finding "that firms that have adopted automatic enrollment have savings plan participation rates of approximately 83%, a full 18% points higher than in firms that have not adopted automatic enrollment."
The memo added: Automatic enrollment has shown to increase participation among these groups so that participation is closer to their counterparts."
New York state has had a voluntary Secure Choice law.
The same day that the bill was passed, New York City Mayor Bill de Blasio signed into law a mandatory auto-enrollment payroll deduction IRA program for employees of private sector employers which do not offer a retirement plan and have at least five employees.
The bill will now be sent to the state Senate for approval, confirmed Iordan Mentore, a spokesman for the New York state Assembly. He added that the bill is expected to pass.
