New York is close to joining a growing list of states that are creating a retirement plan option for private sector employees who do not have access to 401(k)-like programs at work.
The New York program was included in Friday’s budget deal, which Gov. Andrew M. Cuomo is expected to sign. The plan would enable businesses to provide workers with access to Roth individual retirement accounts overseen by the state. An estimated 3.5 million private sector employees in New York work for employers that do not offer a pension, a 401(k) plan or another savings option, according to AARP, which has lobbied in support of the plans.
“For years, we have been working to develop and pass a retirement program that would give millions of New Yorkers the opportunity to save for their futures,” Mr. Cuomo said in a statement. “In this year’s budget, we proposed and passed a common-sense, progressive reform that will strengthen our work force.”
Ten states, including New York, are on the verge of enacting such plans or already have them. The plans have been moving ahead even though Congress rolled back Obama-era rules meant to encourage states to create retirement programs for people without workplace savings accounts.
Oregon was the first state to begin rolling out its program last summer, and several other states are in varying stages of progress. Besides New York, they are California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, Virginia and Washington, according to the Center for Retirement Initiatives at Georgetown University.
Seattle enacted a program of its own in November, while this year, more than 15 states have introduced legislation to start programs or study the issue, the center found.
The state’s plans differ in style. The New York State Secure Choice Savings Program, for example, will be voluntary — employers will not be obliged to sign up and will be responsible only for enabling payroll deductions to the Roth individual retirement accounts.
Much of the plan’s finer details — including the investment manager, the specific investments and their fees — is to be decided by a seven-member board. (The version of the program in Mr. Cuomo’s proposed budget capped investor expenses at 0.75 percent of total investments, but the final version did not include such a cap.)
In contrast, California, Connecticut, Illinois, Maryland and Oregon mandate that certain employers enroll their employees in the state program if they don’t already offer an option. New Jersey and Washington provide a marketplace where employees can choose among providers and offerings. Washington’s program, which is also available to the self-employed, opened to businesses and individuals last month.
The New York legislation calls for the plan to be developed in roughly two years, though it could be delayed.