Cortese’s Bill Would Help More Californians Save for Retirement

Senator Cortese, (D-Silicon Valley), Chair of the Senate Labor, Public Employment and Retirement Committee, has teamed up with California State Treasurer Fiona Ma to provide more Californians the opportunity to save for their retirement by expanding eligibility of the CalSavers program.

The CalSavers Retirement Savings Program (formerly “Secure Choice”) was created by Senate Bill 1234 (de León, 2016) for private sector workers whose employers do not offer a retirement savings program. CalSavers is an automatic enrollment individual retirement account (IRA) available to employees, with no employer fees or fiduciary liability.

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.

SB 1126 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 help more California workers prepare for their future and find financial security in retirement, at no cost to our taxpayers” says Senator Cortese.

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

“CalSavers was created to provide a retirement savings program for the millions of employees who are not offered one by their employer,” explained Treasurer Fiona Ma. “I can attest that this program is working, and we want to expand this same opportunity to our smaller business owners to help them recruit and retain talent, and help their employees retire with dignity”.

CalSavers is required by statute to be self-sustaining based on participant fees and, to this end, SB 1126 would result in no costs to the state or taxpayers. The Program currently operates with a small start-up loan that will be repaid with interest.

SB 1126 is sponsored by the California State Treasurer’s Office.