NEW “SECURE CHOICE” PLAN OPENS DOOR TO RETIREMENT FOR MILLIONS OF PRIVATE SECTOR WORKERS IN CALIFORNIA
Governor Brown’s Signature on SB 1234 (De León) Marks Biggest Expansion of Retirement Opportunity in Generations
Sacramento, CA – Members of the Service Employees International Union (SEIU) in California praised California’s leadership in establishing a voluntary retirement savings plan for millions of private-sector, home-based and self-employed workers. The Secure Choice plan signed into law today by Governor Jerry Brown will make more than seven million Californians eligible to save for retirement through payroll deductions, with accounts that follow them throughout their working years.
The significance of this new approach to retirement security is enormous – the Secure Choice plan will make retirement savings possible for millions of Californians for the first time in their lives. Access to a simple, automatic retirement savings plan is crucial to head off a projected tsunami of senior poverty that will take its biggest toll on women, Asian Americans and Latinos who are a growing share of future seniors.
Last year, University of British Columbia and University of California at Berkeley researchers found California seniors are increasingly financially vulnerable and need solutions to invest in their future and protect that investment. Their “Aging California’s Retirement Crisis: State and Local Indicators,” found the following:
California’s senior population is rapidly growing, with seniors age 80 and older, Latinos, and Asians, and women estimated to continue to make up a majority of seniors. These are populations that tend to have fewer resources in retirement.
Three out of ten seniors in California do not have enough income to cover their basic needs.
Older seniors, seniors of color, older women, unmarried seniors, and renters are more likely to be poor and to struggle to meet their basic needs.
“Before this law was passed, I thought I would have to keep working until I die,” said Blanca Rodrigues, a single mother who lives in San Jose and has two jobs, working at McDonalds and a 76 gas station. “I work nonstop just to pay the rent and help my kids pay for college – so retirement has been such a far off dream. With Secure Choice, just saving a little will go a long way toward helping me achieve a future where I can spend more time with my family.”
“SEIU members believe the dignity of retirement should be available to everyone who works hard throughout their lives,” said Yvonne Walker, President of SEIU Local 1000 and Chair of SEIU Retirement Security Committee. “The Secure Choice plan is a turning point in the history of our state – and our 700,000 members are proud to have fought for a plan that closes the income gap for all seniors.
“Our members helped bring Secure Choice from concept to reality, following through on our commitment to ensure every Californian has access to a dignified retirement. Thousands of our members shared their stories, sent letters, or testified at public hearings across the state as the new plan was shaped,” Walker continued. “Strengthening and expanding Social Security is also a part of SEIU’s plan to ensure every hard-working person has a pathway to a secure retirement.”
The California Secure Choice Retirement Savings Investment Board will meet in October to begin discussing the key steps to setting up the plan. First steps will include partnering with public entities and firms to establish the capacity to enroll and track participants at the scale required in the next few years. The plan may begin accepting contributions in the next two years.
“I’ve worked hard my whole life, and no job I’ve done is as rewarding or as challenging as caring for my young son who needs a ventilator, a feeding tube, and full-time care,” said Robert Bolts, a home care worker and member of SEIU Local 2015. “Caring for my son is the right decision for my family, but it comes at a cost; I don’t qualify for any form of retirement – not even Social Security. I’m encouraged that the Secure Choice program will help people like me who are living paycheck to paycheck with no safety net. I’m proud that by telling my story, I had a part in passing this important law that will help millions of Californians look forward to the future with dignity, not fear.”
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