June 20, 2012 (PLANSPONSOR.com) - The California State Senate passed a measure creating a retirement savings plan for private sector workers who lack access to a workplace retirement plan.
The bill, SB 1234, establishes the California Secure Choice Retirement Savings Investment Board under the State Treasurer’s office, modeled after the public-private partnership ScholarShare, California’s College Savings Plan. It directs the board to conduct a market analysis and then establish a retirement savings program that offers participants a guaranteed rate of return tied to the 30-year Treasury bond rate.
Employees would have the ability to opt out at any time, and an employers’ only obligation would be to allow their employees to use the workplace payroll system to make regular payments to their savings accounts.
State Senator Kevin de León claims the bill is being hailed by small business owners, for which providing a retirement plan can be too costly or burdensome.