Employers aren't required to contribute money to employees' retirement account. Although the city will administer it, this private-sector program is unrelated to city public employee retirement plans.
The law covers employees age 21 or older who work at least 20 hours a week. The New York City program will default to a Roth IRA with a contribution rate of 5% of annual salary based on an annual maximum of $6,000 in 2021 for workers below age 50 and $7,000 for older workers.
Employees can change the contribution rate, choose a traditional IRA or opt out of the program. The Retirement Security Plan would be portable.
The retirement savings board will consist of three members appointed by the mayor with experience in areas such as retirement savings plan administration, investment, and actuarial or demographic background, the law says.
The mayor, comptroller and public advocate will select one person each to serve on an advisory committee for the board.
Mr. Kallos introduced an authorization bill in 2017 and another council member, I. Daneek Miller, introduced a retirement savings board bill also in 2017. The bills were amended in May 2018, but the legislation stalled in the City Council.
Mr. Kallos said legislators were thwarted by former president Donald Trump in April 2017 rolling back regulations under President Barack Obama allowing states and municipalities to offer retirement plans to private-sector employees.
Although several governments launched their auto-IRA programs, Mr. Kallos said city and council members feared their efforts could be defeated in court. He described the federal court circuit covering New York as "conservative."
"When Trump did this, the city basically felt let the other jurisdictions fight it out," he said. "We didn't want to risk it."
Soon after Joe Biden was elected president, City Council members acted quickly. The Committee on Civil Service and Labor approved the bills April 29. On the same day, the council voted 45-3 to support both bills.
"With the Biden administration, we have the support we need," Mr. Kallos said during the May 11 law-signing ceremony, reflecting his belief that the Biden administration won't try to block implementation of the program. New Yorkers should have a "right to retire," said Mr. Kallos, adding that 1.5 million workers could be aided by the legislation.
"This is going to change lives," Mr. Miller said.