Posts Tagged: IRA
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.
Calpensions: President Obama said he has directed his labor department to propose rules showing states how to create what in California could be an “automatic IRA,” a payroll deduction that puts money into a tax-deferred savings plan unless workers opt out. The rules are expected to answer a key question: Is Secure Choice exempt from a federal retirement law, ERISA, that not only has employer administrative costs but may also expose employers to liability for failed investments and other problems?
It had a name, Secure Choice, and now an attempt to create the first state-run “automatic IRA” for workers with no retirement plan has its first donors, authorization to hire consultants and a favorable response from a wide range of groups asked for advice. The author of the program, Sen. Kevin de Leon, D-Los Angeles, may become the next leader of the state Senate. So the plan being developed by a nine-member board could have a strong advocate when it comes back to the Legislature for approval.