We Get Support From:
Become a Supporter 
 We Get Support From:
Become a Supporter 

California's State-Run Retirement Program Imperiled By House Vote

76657755@N04  / Flickr
 

76657755@N04 / Flickr

The U.S. House of Representatives has voted for a resolution that could disallow a new state-run retirement program in California, affecting as many as seven million workers.

The program, called Secure Choice, will automatically enroll employees whose companies don’t offer retirement plans in a state-run plan, unless they opt out.

But the program relies on an Obama Administration rule that exempts state-run programs from a federal retirement law that could put businesses and taxpayers on the hook for investment losses.

"It would make it very, very difficult," says state treasurer and gubernatorial candidate John Chiang, who oversees the program. "I know there would be some high-thinking as to what we could do in place of the fact that we had the Department of Labor rules, but it would just be better if everybody was on the same page."
Removal of the rule would not necessarily end California’s program, but would expose it to lawsuits.

The financial services industry has been the main opponent of both the federal rule and California’s program, arguing it leaves workers without protection.
 
Repeal of the rule still requires a majority vote in the Senate and the President’s signature.

Ben Bradford

State Government Reporter

As the State Government Reporter, Ben covers California politics, policy and the interaction between the two. He previously reported on local and state politics, business, energy, and environment for WFAE in Charlotte, North Carolina.  Read Full Bio 

Sign up for ReCap

and never miss the top stories

Delivered to your inbox every Wednesday.

Check out a sample ReCap newsletter.