Bills to Help Californians with Retirement Are Signed into Law

Governor Gavin Newsom signed into law two bills authored by Senator Dave Cortese, (D-San Jose), Chair of the Senate Labor, Public Employment and Retirement Committee, to help retirees and those saving for their retirement.

By expanding eligibility of the CalSavers Retirement Savings Program (formerly “Secure Choice”), SB 1126, sponsored by the California State Treasurer’s Office, would reduce complexity for employers and expand access to CalSavers to those small businesses with one to four employees that are currently not covered; in doing so, this bill would improve employee recruitment and retention across California. 

“SB 1126 will ensure that nearly every working Californian has access to a workplace retirement savings program,” says Senator Dave Cortese (D-San Jose), author of SB 1126. “By assisting both employers and employees, this legislation will help millions of Californians save for their future so that they can retire with security and peace of mind.”

Employers with one to four employees have regularly expressed their desire to have full access CalSavers. This program is currently only available to employees with five employees or more. 

It is estimated that SB 1126 would expand access to CalSavers to approximately three quarters of a million California workers.

“This bill is a major step toward improving retirement security for all working Californians.” said California State Treasurer Ma, who chairs the CalSavers Retirement Savings Board. “For the business community, this bill ensures the smallest employers will no longer be excluded from a valuable tool for employee recruitment and retention.”

Also authored by Senator Cortese and sponsored by the Retired Public Employees Association (RPEA), SB 1168 raises the minimum statutory CalPERS postretirement benefit for local public agency employees from $500 to $2,000 to establish benefit parity and to address the substantial erosion in the value of the CalPERS postretirement lump sum death benefit which the state originally intended to help pay for the retiree’s funeral costs.

The legislature enacted the original $300 lump sum postretirement death benefit for all CalPERS annuitants in 1945. That amount adjusted for inflation would be $4,699 in 2022. Under current law, the benefit is set from $500 to $5,000 depending on the member’s classification and employer.

“The reality is that the current CalPERS postretirement death benefit amount for most public employees is far below the actual cost of a funeral, putting survivors in difficult positions upon the death of a loved ones,” says Senator Cortese. “SB 1168 will provide survivors with a little extra help during a hard time.”