Signed by Governor Jerry Brown, Jr.

Vote Smart's Synopsis:

Vote to concur with House amendments and pass a bill that requires an eligible employer which provides a retirement savings fund to allow employee participation in the California Secure Choice Retirement Savings Program.

Highlights:

• Defines “eligible employer” as a person or entity engaged in an enterprise in the state that has 5 or more employees, excluding the federal and state governments and instrumentalities (Sec. 1).

• Requires an eligible employer to provide a payroll deposit savings arrangement with an employee within the following number of months of this bill’s passage if the employer does not offer a retirement savings program (Sec. 9):

• 12 months for an eligible employer with 100 or more employees;

• 24 months for an eligible employer with 50 or more employees; and

• 36 months for any other eligible employer.

• Exempts an employer that provides an employer-sponsored retirement plan from the provisions of this bill (Sec. 9).

• Specifies an employer is not responsible for the retirement program plan’s administration, investment, or investment performance (Sec. 10).

• Authorizes an eligible employer to set up tax-qualified retirement accounts instead of having payroll deposit retirement savings at any time (Sec. 9).

• Requires a participating employee to contribute 3% of the individual’s annual salary or wages to the program (Sec. 9).

• Authorizes the California Secure Choice Retirement Savings Investment Board to adjust the contribution amount from 2% to 5% according to the length of time the employee has contributed to the program (Sec. 9).

• Authorizes the California Secure Choice Retirement Savings Investment Board to establish automatic escalations of contribution percentages by 1% of salary increase per calendar year, not to exceed 8% of salary (Sec. 9).

• Authorizes an eligible employee to stop participating in the program or stop automatic escalation by completing an opt-out form (Sec. 9).

• Prohibits the California Secure Choice Retirement Savings Investment Board from using more than 1% of the total program funds for administrative costs 6 years after the program’s implementation (Sec. 3).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that requires an eligible employer to provide a retirement savings fund to allow employee participation in the California Secure Choice Retirement Savings Program.

Highlights:

• Defines “eligible employer” as a person or entity engaged in an enterprise in the state that has 5 or more employees, excluding the federal and state governments and instrumentalities (Sec. 1).

• Requires an eligible employer to provide a payroll deposit savings arrangement with an employee within the following number of months of this bill’s passage if the employer does not offer a retirement savings program (Sec. 9):

• 12 months for an eligible employer with 100 or more employees;

• 24 months for an eligible employer with 50 or more employees; and

• 36 months for any other eligible employer.

• Exempts an employer that provides an employer-sponsored retirement plan from the provisions of this bill (Sec. 9).

• Specifies an employer is not responsible for the retirement program plan’s administration, investment, or investment performance (Sec. 10).

• Authorizes an eligible employer to set up tax-qualified retirement accounts instead of having payroll deposit retirement savings at any time (Sec. 9).

• Requires a participating employee to contribute 3% of the individual’s annual salary or wages to the program (Sec. 9).

• Authorizes the California Secure Choice Retirement Savings Investment Board to adjust the contribution amount from 2% to 5% according to the length of time the employee has contributed to the program (Sec. 9).

• Authorizes the California Secure Choice Retirement Savings Investment Board to establish automatic escalations of contribution percentages by 1% of salary increase per calendar year, not to exceed 8% of salary (Sec. 9).

• Authorizes an eligible employee to stop participating in the program or stop automatic escalation by completing an opt-out form (Sec. 9).

• Prohibits the California Secure Choice Retirement Savings Investment Board from using more than 1% of the total program funds for administrative costs 6 years after the program’s implementation (Sec. 3).

Full Bill Text