California Governor Jerry Brown will approve legislation creating the Secure Choice retirement program for private workers, according to a report from the Sacramento Bee.
The bill, passed by the state Senate last month, enrolls private workers without a retirement plan into a state-run 401(k)-style account.
More from the Bee:
Gov. Jerry Brown will sign Senate Bill 1234, which enacts the Secure Choice program, at 9:30 a.m. in his Capitol office. The measure is a priority of Senate President Pro Tem Kevin de León, who has said it will bring stability in old age to the increasing number of workers who are not offered a retirement plan through their employers.
Secure Choice is an opt-out system that will take a portion of participants’ incomes and invest it as a fund, similar to California’s public employee pensions, but without a guarantee from taxpayers. It requires $134 million in up-front expenses from the state, which will be paid back over time.
Backed by organized labor and opposed by business and financial groups, SB 1234 advanced through the Legislature along largely partisan lines. Critics argue that the program will create new risks for a state that already faces hundreds of billions in unfunded pension liabilities, particularly if the Secure Choice investments take a hit in the stock market and pressure mounts to cover the losses.