California launches state-sponsored retirement plan

Posted at 4:45 PM, Jul 02, 2019
and last updated 2019-07-02 19:45:18-04

SACRAMENTO, Calif. (AP) — California has launched a state-sponsored retirement plan targeting employers who don't have options for their workers.

It's part of a state law requiring companies with at least five California-based employees to offer a retirement plan. As many as 300,000 businesses must comply by 2022.

One option is CalSavers, which launched July 1. Companies who sign up for the plan would supply a list of their employees. CalSavers would automatically enroll them and then employers would deduct 5% from their paychecks into a retirement account. Workers can opt out of the plan or choose a different savings rate.

California Treasurer Fiona Ma says the program will help people "retire with dignity."

A recent study by the University of California-Berkeley says half of the state's private sector workers have no retirement assets.