Signed by Governor Jerry Brown, Jr.

Vote Smart's Synopsis:

Vote to concur with House amendments and pass a bill that establishes the California Secure Choice Retirement Savings Program for private sector employees.

Highlights:

• Establishes the California Secure Choice Retirement Savings Trust which provides a statewide payroll deposit retirement savings arrangement for private sector employees that is "convenient, voluntary, low-cost and portable" (Sec. 3).

• Establishes the California Secure Choice Retirement Savings Investment Board as a trustee of the California Secure Choice Retirement Savings Program and authorizes the board to run the program (Sec. 3).

• Authorizes any eligible employer to have the California Secure Choice Retirement Savings Program once the Board opens the program for enrollment (Sec. 3).

• Defines “eligible employer” as an individual or group engaged in an industry in the state including a for-profit or a non-profit employer that has 5 or more employees (Sec. 3).

• Exempts the federal and state government from the definition of eligible employer (Sec. 3).

• Requires employers to designate an open enrollment period at least once every 2 years, during which eligible employees are able to enroll in the California Secure Choice Retirement Savings Program (Sec. 3).

• Requires eligible employees to be enrolled in the retirement savings program, unless the employee voluntarily chooses not to participate (Sec. 3).

• Requires eligible employees participating in the California Secure Choice Retirement Savings Program to contribute 3 percent of their annual salary or wages to the retirement program unless they specify and qualify to contribute at least 2 percent and no more than 4 percent (Sec. 3).

• Specifies that the following are not eligible employees (Sec. 3):
• Individuals covered by a valid Taft-Hartley pension plan;
• Individuals covered under the federal Railway Labor Act; and
• Individuals engaged in interstate commerce.

• Authorizes employers to set up any of the following alternative retirement plans instead of the California Secure Choice Retirement Savings Program (Sec. 3):
• Any type of employer-sponsored retirement plan such as a defined benefit plan or a 401(k) plan; or
• An automatic enrollment payroll deduction individual retirement account (IRA).

• Requires eligible employers to offer the California Secure Choice Retirement Savings Program to their employees in the following increments if the employer does not offer an alternative retirement plan (Sec. 3):
• If the eligible employer has 100 eligible employees, 3 months after the beginning of the program;
• If the eligible employer has 50 eligible employees, 6 months after the beginning of the program; and
• For all other eligible employers, 9 months after the beginning of the program.

• Requires eligible employers who do not make the program available to eligible employees, without “good cause”, to be subject to the following penalties (Sec. 4):
• $250 per eligible employee after 90 days of the notice; and
• An additional $500 per eligible employee after 180 days of the notice.

• Specifies that employers, the state, and any funds of the state will not have any liability for any of the following (Sec. 3):
• The administration, investment, or investment performance of the program; and
• The investment returns, program design, and benefits paid to program participants.

• Prohibits the Board from implementing the program if the IRA arrangements do not qualify for the favorable federal income tax treatment that is usually given to IRAs under the Internal Revenue Code (Sec. 3).

• Prohibits the Board from implementing the program if it is determined that the program is an employee benefit plan under the federal Employee Retirement Income Security Act (Sec. 3).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that establishes the California Secure Choice Retirement Savings Program for private sector employees.

Highlights:

• Establishes the California Secure Choice Retirement Savings Trust which provides a statewide payroll deposit retirement savings arrangement for private sector employees that is "convenient, voluntary, low-cost and portable" (Sec. 3).

• Establishes the California Secure Choice Retirement Savings Investment Board as a trustee of the California Secure Choice Retirement Savings Program and authorizes the board to run the program (Sec. 3).

• Authorizes any eligible employer to have the California Secure Choice Retirement Savings Program once the Board opens the program for enrollment (Sec. 3).

• Defines “eligible employer” as an individual or group engaged in an industry in the state including a for-profit or a non-profit employer that has 5 or more employees (Sec. 3).

• Exempts the federal and state government from the definition of eligible employer (Sec. 3).

• Requires employers to designate an open enrollment period at least once every 2 years, during which eligible employees are able to enroll in the California Secure Choice Retirement Savings Program (Sec. 3).

• Requires eligible employees to be enrolled in the retirement savings program, unless the employee voluntarily chooses not to participate (Sec. 3).

• Requires eligible employees participating in the California Secure Choice Retirement Savings Program to contribute 3 percent of their annual salary or wages to the retirement program unless they specify and qualify to contribute at least 2 percent and no more than 4 percent (Sec. 3).

• Specifies that the following are not eligible employees (Sec. 3):
• Individuals covered by a valid Taft-Hartley pension plan;
• Individuals covered under the federal Railway Labor Act; and
• Individuals engaged in interstate commerce.

• Authorizes employers to set up any of the following alternative retirement plans instead of the California Secure Choice Retirement Savings Program (Sec. 3):
• Any type of employer-sponsored retirement plan such as a defined benefit plan or a 401(k) plan; or
• An automatic enrollment payroll deduction individual retirement account (IRA).

• Requires eligible employers to offer the California Secure Choice Retirement Savings Program to their employees in the following increments if the employer does not offer an alternative retirement plan (Sec. 3):
• If the eligible employer has 100 eligible employees, 3 months after the beginning of the program;
• If the eligible employer has 50 eligible employees, 6 months after the beginning of the program; and
• For all other eligible employers, 9 months after the beginning of the program.

• Requires eligible employers who do not make the program available to eligible employees, without “good cause”, to be subject to the following penalties (Sec. 4):
• $250 per eligible employee after 90 days of the notice; and
• An additional $500 per eligible employee after 180 days of the notice.

• Specifies that employers, the state, and any funds of the state will not have any liability for any of the following (Sec. 3):
• The administration, investment, or investment performance of the program; and
• The investment returns, program design, and benefits paid to program participants.

• Prohibits the Board from implementing the program if the IRA arrangements do not qualify for the favorable federal income tax treatment that is usually given to IRAs under the Internal Revenue Code (Sec. 3).

• Prohibits the Board from implementing the program if it is determined that the program is an employee benefit plan under the federal Employee Retirement Income Security Act (Sec. 3).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that establishes the California Secure Choice Retirement Savings Program for private sector employees.

Highlights:

• Establishes the California Secure Choice Retirement Savings Trust which provides a statewide payroll deposit retirement savings arrangement for private sector employees that is "convenient, voluntary, low-cost and portable" (Sec. 3).

• Establishes the California Secure Choice Retirement Savings Investment Board as a trustee of the California Secure Choice Retirement Savings Program and authorizes the board to run the program (Sec. 3).

• Authorizes any eligible employer to have the California Secure Choice Retirement Savings Program once the Board opens the program for enrollment (Sec. 3).

• Defines “eligible employer” as an individual or group engaged in an industry in the state including a for-profit or a non-profit employer that has 5 or more employees (Sec. 3).

• Exempts the federal and state government from the definition of eligible employer (Sec. 3).

• Requires employers to designate an open enrollment period at least once every 2 years, during which eligible employees are able to enroll in the California Secure Choice Retirement Savings Program (Sec. 3).

• Requires eligible employees to be enrolled in the retirement savings program, unless the employee voluntarily chooses not to participate (Sec. 3).

• Requires eligible employees participating in the California Secure Choice Retirement Savings Program to contribute 3 percent of their annual salary or wages to the retirement program unless they specify and qualify to contribute at least 2 percent and no more than 4 percent (Sec. 3).

• Specifies that the following are not eligible employees (Sec. 3):
• Individuals covered by a valid Taft-Hartley pension plan;
• Individuals covered under the federal Railway Labor Act; and
• Individuals engaged in interstate commerce.

• Authorizes employers to set up any of the following alternative retirement plans instead of the California Secure Choice Retirement Savings Program (Sec. 3):
• Any type of employer-sponsored retirement plan such as a defined benefit plan or a 401(k) plan; or
• An automatic enrollment payroll deduction individual retirement account (IRA).

• Requires eligible employers to offer the California Secure Choice Retirement Savings Program to their employees in the following increments if the employer does not offer an alternative retirement plan (Sec. 3):
• If the eligible employer has 100 eligible employees, 3 months after the beginning of the program;
• If the eligible employer has 50 eligible employees, 6 months after the beginning of the program; and
• For all other eligible employers, 9 months after the beginning of the program.

• Requires eligible employers who do not make the program available to eligible employees, without “good cause”, to be subject to the following penalties (Sec. 4):
• $250 per eligible employee after 90 days of the notice; and
• An additional $500 per eligible employee after 180 days of the notice.

• Specifies that employers, the state, and any funds of the state will not have any liability for any of the following (Sec. 3):
• The administration, investment, or investment performance of the program; and
• The investment returns, program design, and benefits paid to program participants.

Full Bill Text