Looks like the California legislature wants to run more businesses out of the state. The legislature just passed a law mandating private employers provide retirement plans for employees. The employees can opt out of the plan but the employer still has to offer it to employees. The Associated Press reports:
"Democratic lawmakers on Friday approved a bill that would create the nation's first state-run retirement program for private-sector workers over the objection of Republicans who said it creates a new liability for taxpayers.
The Senate sent SB1234 to Gov. Jerry Brown on a 25-13 vote just before the Legislature's midnight deadline. The Assembly approved the bill earlier in the day on a 44-24 vote.
Democratic supporters say the bill would establish the California Secure Choice Retirement Savings Program for nearly 7 million low-income workers whose private employers don't offer retirement plans.
According to the bill's author, Sen. Kevin de Leon, D-Los Angeles, the program directs employers to withhold 3 percent of their workers' pay unless the employee opts out of the savings program. It would be administered by a seven-member board chaired by the state treasurer.
Democrats said the program gives workers more savings options, particularly women working low-paying jobs. Supporters say it will not cost the state money because it will be backed by underwriters.
But Republicans said they have too many questions about the program and note that if the underwriter fails to meet investment targets, taxpayers and employers could be held responsible for covering investment losses and administrative overhead.
"It's still troublesome that the measure would have the government take over the retirement, insert itself into the retirement plans in the private sector here," said Sen. Doug La Malfa, R-Willows. "For the state to be usurping that responsibility from the private sector is really a giant leap."
Assemblyman Tom Ammiano, D-San Francisco, defended the bill, saying it sets up a fiscally responsible program. He noted it would not be implemented unless the savings program is exempt from federal rules that cover private-sector defined benefit plans. Such plans have to meet minimum standards under the federal Employee Retirement Income Security Act.
The bill also requires the board to submit an annual audit. It is opposed by businesses, insurance companies and financial services firms.
"I encourage you not to be fooled by the Wall Street subterfuge," Ammiano said. "This is a responsible bill that will be a tremendous benefit for working Californians."
Morrell said low-income workers might be better off financially if they put after-tax earnings into a Roth IRA, which would allow them to earn investments tax-free.
He also expressed concern that the fund could be administered by the California Public Employees' Retirement System. The state's largest pension fund posted an annual return of just 1 percent last year, missing its own long-term annual target of 7.5 percent.
"CalPERS is going to request to manage this money, and I know they've done a pretty good job when the stock market was booming, but the last few years they have not done very well and that's another concern," Morrell said.
De Leon introduced the bill earlier this year in response to what he called the "looming retirement tsunami" as millions of low-wage workers face financial hardship in their retirement years. He said the program would act as a supplement to Social Security by offering private-sector workers a portable savings plan with a guaranteed return.
"One of the most common myths being perpetrated about this bill is that it creates a pension for private-sector workers," Ammiano said."
The analysis from the legislature's website states:
"SCRSP will exist to provide a statewide retirement savings plan for private workers who do not participate in any other type of employer sponsored retirement savings plan. Contributions by employers and employees will be voluntary. Text and analysis of bill
What does one say?
Thursday, September 6, 2012
California mandates retirement plans for private employers
Subscribe to:
Post Comments (Atom)
16 comments:
That leaves me pretty close to speechless. How long until California takes over as HR Director for every business?
Unbelievable.
Spending more money California doesn't have. I don't think they want business to thrive in CA. I'm thinking of buying land for businesses to relocate just over the border in NV. Bet the value there just went sky-high!
Fresh cash for California's retirement system Ponzi scheme. Fresh cash. The corruption of Democrats knows no bounds.
That sounds distinctly plausible, 1:44.
we need to recruit the people who leave to our state
The net outflow of population out of California is well documented. The upside of recruiting those deserting California is that they are highly likely to be actual taxpayers.
How long before Bennie flies out there to speak?
I am from California and the only folks out there that would listen to Bennie live in the inner city or "speaka no english"
Here's where the state gets into trouble:
1. Guaranteeing a minimum rate of return.
2. Requiring the taxpayers/employers to cover any loss of said guarantee.
3. Setting itself up as a defined benefit vs. a defined contribution plan. That's pension vs. 401(k) and there's a big difference between the two.
On the surface, though, creating a program for lower-end employees to contribute to their own retirement is a loft goal, especially for those employees who work for smaller mom & pop shops that don't know how to setup their own 401(k) plans. These folks (and there are lots of them) don't know they can setup an account with a broker and start saving via a Roth IRA. The mandatory 3% contribution has been around for several years in the 401(k) world and has proved beneficial in upping the participation rates for those with low income.
However, considering California's success in pretty much anything it touches...I'm gonna go out on a limb and say this should be scrapped. I can only see three parties making out like bandits: fund companies, politicians and those advisors lucky enough to land the account. No wonder insurance and brokerage firms are against it. California just took a big chunk of their market.
This is a supreme example of government encroachment. I'd be surprised if it survives court challenges. Any piece of a benefits package, in fact the entirety of benefits packages are nothing more than an employer's competitive edge in the recruitment process. The market will smooth it out, if left alone. The employers who offer superior packages will have the highest competetive edge and those with none will survive only if the market allows them to.
It's madness to allow the government to dictate benefits packages. But, hell, California, unlike many states, including Mississippi, dictates such things as breaktime, pay dates, vacations and sexual orientation discrimination in hiring and employment.
I won't be at all surprised in a few years when the law there requires an employer to hire the first homosexual Mexican in line on Monday morning, without regard to qualifications.
My businesses would not have lasted there six months.
You people don't have a clue what you are talking about, sitting in a state that could not find an elephant in a five acre field. Mississippi is one of 5 states that has had NEGATIVE GDP growth in the last 6 months. Wanna badmouth California, well, rocket scientist Mississippian's, California had the 2nd highest job creation rate in the country just this past June. Why don't you worry more about this 3rd world dump y'all call home, or why everybody living in Madison County has 3 eyeballs from inbreeding at the swingers parties!!!
http://www.cnbc.com/id/48018076/America_s_Top_States_for_Job_Creation_2012?slide=10
2. California
Net Job Creation: 211,500
California managed to create jobs in all but two private-sector categories (manufacturing and general services) along with its solid growth rate. Gains in construction and financial activities partly reflect its improving real estate sector. High tech, tourism and international trade are the leading sectors. The state led the nation in job creation in June. Facebook and Zynga both went on hiring binges in the last year.
On the negative side, as might be expected of a cash-strapped state, government payrolls fell by almost 60,000.
Professional & Business Services: 90,800
Education & Health Services: 48,800
Trade, Transportation, Utilities: 42,000
There is a reason you are claiming only one month. Why don't you compare your state to Texas year by year for the last five years?
Texas, what does Texas have to do with it? They are the 2nd largest most populated state in America with a 40% minority population, mainly Hispanics, which everyone in Mississippi wants the cops to stop and check their papers. I suppose NONE of their stellar economic performance in the last 10 years had to do with any of "those" people, hey?
Y'all have your so called "Mississippi Utopia" now, every state office, oh, except for Conway at the AG's office, both chambers of the legislature, and your former deputy sheriff turned Guvna Dewey Bryant, and what do you have, one of America's crappiest economies of any state!!! Lets here some more of your excuses...
Why don't you worry more about this 3rd world dump y'all call home, or why everybody living in Madison County has 3 eyeballs from inbreeding at the swingers parties!!!
Three eyeballs are quite handy though it is tough to get sunglasses to fit properly.
The dunce from California (so he claims) fails to give due recognition to the hundreds of employers that close down shop and leave California each year. If the state uses the same tactics to tally job numbers as the Obama Regime does, they can pretty much claim whatever they like. Why don't we also talk about the number os illegals and a grouping of sanctuary cities that have literally turned themselves over to homosexuals and Mexicans? Or will the poster ask 'Illegals? What's that got to do with California?'
I'm as proud of my three eyeballs as the California poster is of his two nipple rings.
in re:September 8, 2012 12:02 PM
As a former Californian and with very good friends holding on by the skin of their teeth still in California, I have to ask this person, "WTH are you talking about?"
I can tell you very successful thriving businesses in CA are getting squeezed to the point, they are about to start moving out in droves, or shuttering those areas of business than cannot operate profitably as a result of Obamacare. Additionally, with this legislation, you might as well put a nail in the coffin of small to medium size businesses ($5MM - $300MM).
I love to discuss the realities of the California bubble. I know how 1998-2005 was funded through the housing bubble. The economy is falsely propped up by imaginary gains on real estate. Once folks would refinance to access equity over the years, they bought cars, boats, amongst many other items to keep the economy afloat.
There is a reckoning that will happen again in CA, remember the SD base closings? When that does, it will be time for me to get back to CA. Until then, continue to enjoy the foreclosures, the shrinking paybase, the over-regulation and the looming collapse.
As an example, how in the hell do you sustain paying a public servant living in a $1MM house (1200 sq.ft. and artificially inflated) over $100K per year while spending like a drunk in a whorehouse?
I'm not bashing California, I just cannot believe the rose colored glasses a person such as yourself wears. I've seen it before and you are an excellent example of those who will lose it all without even understanding how you got there.
And BTW, Mississippi is a fine place to live. Your attitude seems, welll, um..... ignorant.
Post a Comment