California Assembly debates Secure Choice bill in August 2012

In this 2012 debate over initial legislation, Republican lawmakers denounced what they called a proposal for a "massive" government program, and Democrats argued a state retirement plan would fill "huge gap" for California residents.
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In this 2012 debate over initial legislation, Republican lawmakers denounced what they called a proposal for a "massive" government program, and Democrats argued a state retirement plan would fill "huge gap" for California residents.
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Capitol Alert

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Capitol Alert

California retirement benefit program in Congress’ crosshairs

By Christopher Cadelago

ccadelago@sacbee.com

February 08, 2017 04:32 PM

Congressional Republicans are moving to eliminate Obama administration labor regulations that helped California establish its Secure Choice program, a landmark effort to automatically enroll millions of private-sector workers without retirement plans in a state-run savings account.

The resolution, sponsored by Rep. Tim Walberg, R-Mich., chairman of the subcommittee on Health, Employment, Labor and Pensions, would allow Congress to wipe out federal Labor Department regulations. That would potentially fuel legal challenges to current state programs such as the one in California, as well as impede future moves to enact the benefit in other states.

When Gov. Jerry Brown signed his Senate Bill 1234 in the fall, its author, Senate President Pro Tem Kevin de León, along with state Treasurer John Chiang and other supporters, argued it would help stabilize Californians’ retirement years. They estimated millions of workers could enroll automatically by the end of the decade.

Critics of the program, however, contended it could put pressure on the state to make up any investment losses, while the retirement industry fretted it would create unfair, state-sponsored competition for business.

A study last year by The Pew Charitable Trusts found that a little more than half of California workers have access to employer-sponsored retirement plans, compared with a national average of 58 percent.

On Wednesday, de León blasted the Republican-led rollback plan as “just another Wall Street trick designed to thwart the effort by California and other states to expand retirement security for millions of American workers.”

De León said the move to stymie state and city programs denies the public the opportunity to properly review the legislation and make public comment.

He added: “Opponents are working hard to avoid a public process because they are well aware their arguments fall apart with just a bit of sunshine.”

Christopher Cadelago: 916-326-5538, @ccadelago