California has taken a step closer to becoming the first state to make retirement savings accounts a near-universal benefit for workers with a plan that lawmakers hope will help ease an expected massive shortfall in retirement savings.
A state board Monday sent a set of recommendations to the Legislature calling for the creation of the California Secure Choice Retirement Plan — essentially a 401(k) plan operated by the state and open to private-sector workers whose employers don’t offer a retirement savings plan.
The plan calls for eligible workers to be signed up automatically by their employers and have 2% to 5% of their wages invested in the plan, unless workers opt out.
Business groups have questioned whether the plan could cost employers or make them liable for investment losses or other problems. But state officials have said the retirement plans would be similar to those available to many private-sector employees and, unlike pension plans for state workers, would not be funded or guaranteed by employers or taxpayers.
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