Bloomberg Law for HR Professionals is a complete, one-stop resource, continuously updated, providing HR professionals with fast answers to a wide range of domestic and international human resources...
Feb. 5 — At least 70 percent of the 6.8 million Californians eligible for a state-sponsored private sector retirement savings program are willing to participate and contribute enough to make the program viable, according to a market analysis of the potential for the program.
The analysis recommended that the California Secure Choice Retirement Savings Investment Board, and ultimately the state legislature, move forward with the program with default contribution rates of 5 percent from employees and a default investment vehicle geared toward long-term growth.
Secure Choice should expand its investment choices and automatically increase employee contributions by 1 percent a year to reach 10 percent of salary within a few years of its launch, the Jan. 31 report said. The Secure Choice board released the report publicly Feb. 2.
“The Secure Choice Program is financially viable and self-sustaining even under adverse conditions with poor investment returns and high opt-out rates,” according to the analysis, prepared by Overture Financial LLC for the Secure Choice board.
The analysis is a required step under the 2012 law calling for California to consider launching the first-in-the-nation retirement program for private sector workers. The nine-member Secure Choice board is soliciting public comment on the analysis, and will hold public hearings March 1 in Los Angeles and March 3 in Oakland.
The board will weigh the report's recommendations and public comments at a March 28 meeting, when it will adopt its final report to the legislature outlining the next steps required to launch the program, California Deputy Treasurer Grant Boyken told Bloomberg BNA Feb. 5.
If the legislature moves ahead with the program, private employers with five or more employees that don't offer a retirement savings plan would be required to give their employees access to Secure Choice through payroll deductions. The Secure Choice board, chaired by the state treasurer, would oversee the program.
With the federal Department of Labor tackling the legal issue of Employee Retirement Income Security Act exemption for state-run private retirement investment programs through proposed regulations, the Overture report doesn't make recommendations related to ERISA. The analysis mentions several smaller legal issues the board must tackle if the program moves forward, including securing a determination from the Securities and Exchange Commission that the investment vehicles are IRAs and not new securities that must be registered, Boyken said.
To contact the reporter on this story: Laura Mahoney in Sacramento, Calif. at firstname.lastname@example.org
To contact the editor responsible for this story: Jo-el J. Meyer at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)