Assembly approves bill establishing state-run retirement accounts for all

pension retirementA savings-for-all plan passed the Assembly on Thursday that, if signed into law, will automatically enroll many employees into a state-run individual retirement system.

Secure Choice, if implemented, would require employers of five or more people to automatically enroll employees into portable retirement accounts, with an opt-out clause for the individual.

Proponents of the measure say that while everyone already has the option of investing in a wide variety of retirement accounts, they aren’t — the approximately 7 million people in the state who don’t have employer-based retirement accounts need to be nudged into planning for the future.

“This is a mechanism to get Californians to save for retirement,” Assemblyman Mike Gatto, D-Glendale, said on the floor Thursday, adding that while skeptical at first, he eventually asked himself why he hadn’t thought of the idea.

Others remained skeptical, with concerns over the risk to taxpayers if the market tanks and whether diligent contributors will end up subsidizing those who have not contributed much. 

“I applaud (Senate President Pro Tem Kevin de Leon) for authoring this bill … however, we have some real challenges in this bill,” said Assemblyman David Hadley, R-Torrance, who was a financial adviser prior to his election to the Assembly. “This bill has the makings of an epic problem.”

Gatto reiterated that the accounts are individualized with no risk to the state. Others have pointed out that the accounts will be built on low-risk investments like treasury bills and would lower the demand on Social Security — although critics have pointed that low-risk investments have a low return on investment, which could give account holders a false sense of security. 

The program, if signed into law, would be administered by a nine-member California Secure Choice Retirement Savings Investment Board, which is chaired by the state treasurer.

The measure heads back to the Senate next, where it sailed through earlier this year.

9 comments

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  1. Nancy Keeler
    Nancy Keeler 26 August, 2016, 11:49

    Considering what the govt has done with the money already taken for our retirement (Social Security) I have no faith in them taking any more. I will definitely be Opting Out. I’m surprised we worker-drones are even being offered the chance to opt out. Must have been a mistake on their part to actually let We The People decide.

    Reply this comment
  2. Queeg
    Queeg 26 August, 2016, 17:30

    Comrades…

    Research Cypress who recently took big bucks out of owner accounts….debtor nations will always look at choice plum accounts to raid ……

    Reply this comment
  3. Bill - San Jose
    Bill - San Jose 26 August, 2016, 18:25

    So, this mandatory 401K program that is ran by the most corrupt state in the Unioni, which feels like a pension system of sorts, that would ask this panel to invest this money into …. fill in the blanks ..

    and down the street you have CalPERS, who are already nearing another bailout.

    This won’t be received very well.

    Reply this comment
  4. T Ted America
    T Ted America 27 August, 2016, 08:53

    Bill— Cal Pers is 306 billion and healthy little buddy— not too sure what you’re smoking —– are you a Trump guy?

    Reply this comment
  5. michael
    michael 28 August, 2016, 09:38

    Ted,

    Another liberal money grab. How are those carbon credits working out for you along with the Not so high speed rail.

    Reply this comment
  6. LOSBANOS1
    LOSBANOS1 28 August, 2016, 14:53

    THIEVES !!!!! Trump doesn’t look so bad now. What do we have to lose ?

    Reply this comment
  7. Mike
    Mike 28 August, 2016, 20:28

    Ted was sodomized by an undocumented ferret.

    Reply this comment
    • ricky65
      ricky65 29 August, 2016, 20:39

      That’s just a rumor Mike. Actually we need to ‘ferret’ out the truth here.
      It was not a ferret that committed this vile act with Teddy.
      It was a gerbil. A pretty close cousin to the ferret no doubt. But there was no coercion here. I’m sure the act was entirely voluntary by both parties.

      Reply this comment

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