The state Treasurer's headquarters in Sacramento, where CalSavers is based. (Photo: Kit Leong, via Shutterstock)
A new state workplace retirement savings program, CalSavers, will open to an estimated 250,00 to 300,000 employers on July 1 — offering an automatic IRA payroll deduction for the 7.5 million California workers with no retirement plan on the job. The massive program, expected to handle billions in savings, is voluntary for employees.
But a series of state court rulings are widely believed to mean that the pension offered current workers on the date of hire becomes a vested right, protected by contract law, that can only be cut if offset by a new benefit of comparable value. Santa Clara County Superior Court Judge Patricia Lucas said in her ruling the question before her court is “one of law, not of policy,” referring to a state Supreme Court response to city and county briefs on an Orange County attempt to cut retirement costs.