If you’re currently working in California without a pension or a 401(K) for your post-retirement life, fear not, CalSavers is here to help.
As of July 1, California employees working for companies in the private sector with five or more workers will benefit from an “ambitious” state-sponsored program that requires employers who don’t offer some sort of retirement savings benefit to sign up, The Los Angeles Times reported.
Thanks to the new law, over 300,000 businesses and 7.5 million employees will enroll over the next three years. The program, according to the Times, will bypass many of the expensive, time-consuming set-up procedures required to onboard workers to traditional retirement plans. The entire process, according to CalSavers, takes about 30 minutes and costs companies nothing.
“When it comes to retirement income security, most working Californians are in trouble,” Nari Rhee, the director of the Retirement Security Program at UC Berkeley Labor Center told the Times. “[CalSavers will help] private sector workers who have fallen through the yawning gaps in the U.S. retirement system.”
As businesses have cut back on benefits for workers, including retirement savings plans, California has plummeted to 45th out of 50 states in the number of workers who are offered a means to save at work. The number of California employees in the private sector without a pension or 401(K) went from 49 percent 20 years ago, to 61 percent today, a study from the labor center found.
“People are worried they will have to work until they die,” Katie Selenski, CalSavers’ executive director told the Times. “If our elderly are living in poverty, it is a moral problem, but also a fiscal problem. If they have to rely on public assistance, it drives up taxpayer costs.”
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