California May Develop First State-Run Retirement Program for Private Sector
The state of California has US$ 617 billion in public debt; furthermore, California has higher per capita debt than the national average.
This new board is tasked to create a plan that would automatically withhold 3% of workers’ pay without any type of employer sponsored retirement plan into a retirement account. The account would be portable. California employees would have to opt out of the plan or the deductions would become automatic. Plan participants would have to sign a liability waiver stating that California would not be liable for losses.
Who will manage the money?
In the legislation it calls for the 3% contributions to be managed by the California Public Employees’ Retirement System (CalPERS) for a fee, the CA State Treasurer, and/or a private manager. This will be determined by the investment board.
California Secure Choice Retirement Savings Investment Board Composition
- California State Treasurer
- California State Controller
- CA State Director of Finance (designee)
- Expert in Retirement Savings and Investments (Appointed by the CA Senate Committee on Rules)
- Small Business Representative (Appointed by CA Governor)
- Public Member (Appointed by CA Governor)
- Employee Representative (Appointed by CA Speaker of the Assembly)