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. State officials say as many as 300,000 businesses have to comply over the next three years.
One option is CalSavers, which launched July 1. Employers who sign up for the state-sponsored plan would automatically enroll their workers and deduct 5% from their paychecks into a retirement account. Workers can opt out of the plan. They can also choose their own 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.