Governor’s Retirement Proposal Deserves Review

February 9, 2018

President's Message

Governor’s Retirement Proposal Deserves Review

The ability to retire and financial security in retirement have become unreachable goals for too many workers. Low wage and middle-income earners in the private sector often have no retirement options through their employer. Workers who have access to defined benefit pension plans, the safest and most secure retirement option, are also finding it more difficult to find stability in retirement. Social Security, a necessary and vital part of most people’s retirement income, is not enough by itself.

Governor Cuomo’s executive budget proposal includes the creation of a voluntary retirement savings that would operate like a Roth IRA. The plan would allow for contributions via payroll deduction where employers agree and include options for individuals to invest based on their age, risk tolerance and financial circumstances. Contributions to Roth IRAs are not tax deductible but the withdrawal of accumulated contributions and earnings and are not taxed, once an individual reaches age 59 ½.

Retirement savings plans like Roth IRAs, traditional IRAs or 401ks are defined contribution plans and by themselves are not a panacea to address the income shortfalls that retiring workers face. Unlike defined benefit plans that offer reliable and predictable pensions, Roth IRAS involve risk and exposure to volatility in the stock market. Even under the best circumstances it is unlikely that most people could save enough to retire solely on a Roth IRA structure, and irresponsible investing could lead to a loss of one’s entire savings.

Knowing and understanding the risks and shortcomings, defined contribution plans can still be a tool that combined with social security and other sources of income will help provide stability in retirement. Particularly for workers who do not have access to any other means of savings, this proposal has the potential to give an option of savings for individuals that would otherwise have nothing.

The NYS AFL-CIO strongly urges that a defined benefit option be included as part of this proposal. That is clearly the best way to help retirees ensure a reliable source of income. Access to education and advice about the risks of the defined contribution plans should also be included so that individuals who do not have investing experience at least have access to assistance in safeguarding their savings. With adequate options and protections this plan could be a positive option for workers.

– Mario Cilento, President

Call To Action

Labor Lobbyists Meeting

Monday, February 12, 2018, 1:00 p.m.100 South Swan Street, Albany, NY Senator Terrence Murphy, sponsor of several NYS AFL-CIO legislative priorities, will address the lobbyists.

Infrastructure Task Force Meeting

Monday, February 12, 2018, 2:00 p.m. 100 South Swan Street, Albany, NY

Issue of the week

Elevator Safety is a Priority (S.5137A/A.5815B)

This bill will enact reforms to strengthen the licensing of elevator construction and repair workers, as well as strengthen the oversight of contractors. This bill enacts important safety provisions that will protect both the general public and workers. The construction, inspection, maintenance and repair of elevators and service lifting devices require specialized skills and experience. This bill will ensure that only qualified workers who have received that training and experience provide these services.

Therefore, this Federation urges immediate passage.

For further information contact Mike Neidl at 518-436-8516 or by email [email protected]