Vol. 1, No. 7, Published November 4, 2015
Excitement Grows for Secure Choice, Which Could Help Millions of Californians in Retirement
Enabling Legislation Planned for 2016; Treasurer on Listening Tour
Treasurer John Chiang attends a Secure Choice forum hosted by the San Francisco Chamber of Commerce.
California Treasurer John Chiang is playing a key leadership role in planning to create the country's largest state retirement security program for millions of workers who could be headed toward spending their golden years in poverty.
He recently traveled to Washington, D.C., to meet with key policy staff to ensure California will be able to move forward with implementing Secure Choice. The program could help 7.5 million private-sector employees who currently lack access to employer-sponsored retirement plans by providing a voluntary, low-risk, low-cost, portable retirement savings plan.
The Treasurer plans to support legislation early next year to get Secure Choice up and running. Senate President Pro Tem Kevin de Leon shepherded the Secure Choice concept through the Legislature in 2012 in the form of SB 1234, which allowed for a feasibility study of such a program.
The Treasurer has also led recent listening sessions in Bakersfield and San Francisco to spread the word about Secure Choice, and more sessions are planned. Meanwhile, the Treasurerís California Secure Choice Retirement Savings Investment Board is working hard to set the stage for implementation.
Why Secure Choice is Needed
In California, roughly half of workers do not have access to a retirement savings plan through their employer. Although Social Security provides invaluable financial security for many, it is not enough to ensure Californians have the financial resources they need to afford basic living expenses. For example, the national average monthly Social Security benefit is around $1,300, while the average cost of rent is $1,240.
Although most workers know saving for retirement is vital to providing financial security, millions of workers in California have little to nothing saved for retirement. The Secure Choice Board was established to find solutions to the problem of retirement insecurity in California by making it easy and simple to save for the future.
Secure Choice would give small-businesses in the state access to a safe retirement savings program at little to no cost and with minimal administrative burden. The program would be financed by contributions to the program just like any retirement savings plan and taxpayers would not be liable for payment of benefits.
Big ideas like Secure Choice require some clarity on how the program operates within federal law. Thatís why the Treasurer travelled to Washington, D.C., to meet with federal leaders in an effort to build support for the program.
The Secure Choice Board has been busy overseeing contracted work on a market analysis and financial feasibility study. The results of the study, along with recommendations for retirement plan design, will be released by the end of this year.
Sign up for Secure Choice listening sessions:
Friday, Nov. 6, 10:30 a.m. to noon
San Bernardino Valley College
Business Building, Room 100
701 South Mount Vernon Ave.
RSVP: (951) 533-1122
Friday, Nov. 6, 1:30-3:30 p.m.
Riverside City College
4800 Magnolia Ave.
RSVP: (951) 533-1122
Intersections is prepared by staff of the State Treasurer's Office. This newsletter should not be used for making investment decisions about State of California bonds or notes. Potential investors always should obtain and read the Official Statement published by the State for each issue of bonds or notes. Send us suggestions and feedback.