On July 13, 2015, President Obama announced he has directed the Labor Department to issue a rule that clarifies the path forward for state-based retirement savings initiatives, allowing for full implementation of California’s landmark Secure Choice Retirement Program.
Back in 2012, SEIU Local 99 members working in child care shared their stories with state legislators about their fears of retiring in poverty or working until they die. Lawmakers listened. In September of that year, they took a bold step in the fight against elder poverty by approving a bill to provide private sector workers an opportunity to enroll in the California Secure Choice Retirement Savings Program, a voluntary retirement plan with guaranteed benefits.
Governor Brown signed into law the legislation authored by Senate President pro Tempore Kevin de León (SB 1234), which recognizes the need to provide retirement security for the 6.3 million Californians in lower and middle-income private-sector jobs who have no access to a retirement plan. Secure Choice provides workers a portable and reliable retirement plan that serves as a vital supplement to Social Security, encouraging participation through automatic enrollment and small payroll deductions with the option of opting out.
During recent implementation of state-based programs, concerns have remained about a lack of clarity regarding preemption by a federal pension law called the Employee Retirement Income Security Act of 1974 (ERISA). With today’s announcement, the White House has notified states that by the end of the year, the U.S. Department of Labor will publish a proposed rule clarifying how states can move forward, including with respect to requirements to automatically enroll employees and for employers to offer coverage.
“Recognizing that states are leading the way on retirement security, President Obama’s action removes the most signification barrier to state action across the country,” Senator De León said. “California, and states that follow our lead, will now be able to ensure tens of millions of hard-working men and women will have a shot at retiring with dignity.”
