Working class citizens of California have an opportunity to secure their financial futures, compliments of legislation recently approved by the California State Assembly and now working its way through the Senate.
Currently, six million employees, 41 percent of the state’s workforce, work at a job that does not offer a pension or a retirement savings plan. Assistant Majority Leader Kevin de Leon’s legislation, Assembly Bill 2940, would give the California Public Employees Retirement System (CalPERS) the right to offer private sector employees, who do not have access to retirement savings plans through their employers, access to an Individual Retirement Account plan. The bill was passed by the Assembly in late May, and now has been sent to the Senate Public Employment and Retirement Committee to be reviewed later this month.
“Most hard working Californians don’t have a retirement savings plan, let alone a target date to retire. Instead, most are just working until their bodies give out, not even able to enjoy their ‘golden years,’” said Leon.
Through its creation of the California Employee Savings Program (Cal-ESP), AB 2940, which is sponsored by the New American Foundation and supported by more than 30 organizations and associations, will at no cost to tax payers, offer voluntary, secure and fully portable retirement savings accounts workers can take from job to job without penalty. The bill will provide workers with an option to contribute to a savings account as well as give employers a chance to contribute to their own as well as to their employees’ savings accounts, through a basic automatic payroll deduction, using the Employment Development Department (EDD) system.