Last September, California Governor Jerry Brown signed into law SB 1234 (De León) which implements the California Secure Choice Retirement Savings Program. 2016 Cal. Stat. ch. 804. If you haven’t heard of the program, California State Treasurer John Chiang describes it as the “most ambitious push to expand retirement security since the passage of Social Security in the 1930s”. The program got its start in 2012 with the enactment of a bill with the same number, SB 1234 (De León, Chapter 734, Statutes of 2012). That legislation created the initial statutory framework for program. It also required the program’s board to perform a market analysis and feasibility study.
Here is how the Treasurer’s office describes the program:
Once Secure Choice is fully operational, employers with 5 or more employees that don’t already provide a retirement plan will be required to either begin to offer a retirement plan or provide their employees access to Secure Choice: employers with more than 100 employees will need to offer a retirement plan within 12 months after the program is open for enrollment; employers with more than 50 employees will need to offer a retirement plan within 24 months after the program is open for enrollment; and employers with more than 5 employees will need to offer a retirement plan within 36 months after Secure Choice is open for enrollment.
Given the widespread potential impact, I’m surprised that the program hasn’t attracted a lot of attention. Perhaps this apathy is due to the fact that the program won’t go into effect for at least two years. According to the Treasurer’s office, 2019 is likely to be the earliest that large employers that do not offer a retirement plan to their employees will be required to provide access to Secure Choice.