California may soon offer a retirement savings plan to the nearly 7 million private sector workers who don't already get one through their job.
The state Assembly on Thursday approved Senate Bill 1234, marking a huge victory for Senate President Pro Tem Kevin de León. The Los Angeles Democrat has worked for years on the issue, authoring legislation in 2012 that paved the way for what he calls the Secure Choice savings program.
Under the bill -- which needs one more procedural vote in the Senate before heading to Gov. Jerry Brown's desk -- workers at companies with five or more employees would automatically be enrolled in a state-run individual retirement account. Employees would contribute 3 percent of their earnings -- they could opt out -- into an individual retirement account, or IRA, that would be managed by a state board.
"It's a long time coming -- now, close to 7 million workers in the private sector who have no access to any kind of retirement security will now have access," de León said. "And we are not just talking about people at the lowest economic strata. We are talking about many middle-income workers, but especially women."