NEW YORK – Today Demos applauded the announcement by New York City Comptroller John Liu of a new proposal for the creation of “New York City Personal Retirement Accounts.” These accounts would be both a historic achievement and a huge step towards enabling millions of New York City workers to obtain the retirement security they so desperately need.
According to the Comptroller's news release, “New York City Personal Retirement Accounts” would be available to all New York City workers, providing a secure, low-cost place for employers and employees to save for retirement. Unlike 401(k)-type accounts, Liu’s plan explained today that the plans would be portable, giving workers a consistent place to save throughout their careers. Contributions to the personal retirement accounts would be pooled, reducing investment and administration costs and raising returns.
The contributions to these accounts would be managed by the same not-for-profit, objective financial professionals who manage the assets in New York City’s pension funds. As added protection, the assets in these new accounts would be kept in a legally-separate, walled-off pool from the public sector funds; no money could ever be moved between the two.
“Comptroller Liu has hit the nail on the head by announcing a plan for personal retirement accounts,” explained Robert Hiltonsmith, Policy Analyst at Demos’ Economic Opportunity Program. “These accounts would offer an alternative to risky, high-fee 401(k)s and IRAs, ensuring that more of workers’ hard-earned savings went towards building their retirement nest eggs and not to inflated 401(k) fees. Under this plan, New York City taxpayers will never be on the hook for a single dime. This would establish New York City as a leader in combatting the coming retirement crisis. By helping to ensure that workers have enough income to retire with some measure of comfort, NYC would not only reduce the costs to the city and state of an impoverished elderly population, but we fulfill a value that should be held by all societies: that its citizens should be able to rest in their old age after a lifetime of hard work.”
Robert Hiltonsmith is available for comment. Please see the contact information above.