The New York Times editorial board on Monday called California’s Secure Choice Retirement Program “a better way to retire.”
The Times’ editors note that California is “taking on the mantle of leadership” by advocating for the creation of an auto-enrolled, supplemental retirement savings program for more than 7 million private sector works in California.
“At any given moment, about half of the private-sector employees in the United States—some 60 million people—do not have any type of employer-sponsored retirement plan…And yet, retirement prospects are about to improve for the 6.8 million employees without retirement coverage who work in California for businesses with five or more workers,” The New York Times editors wrote. “Next week, the California Legislature is set to vote on a plan, nearly four years in the making, to automatically enroll most uncovered workers in individual retirement savings accounts. Employee advocates are confident the measure will pass, and Gov. Jerry Brown is expected to sign it. When that happens, Californians will gain more security—and the rest of the nation will gain a national model for promoting retirement savings.”
The Times’ editors note that a trade group for the mutual fund industry is pushing for a delay, but in fact “one of the reasons it has taken California so long to get to this point is the time and effort it put into clarifying the ways in which a state-sponsored plan would mesh with federal pension law…there is, in brief, no reason to delay.”
“What is most important, however, is for employees to have the chance to start saving consistently,” the editors added. “Other states, including Oregon and Illinois, have enacted similar plans that will start taking effect beginning next year. Several states are considering such plans. California, however, was the first to broach the idea and will be the largest and most influential to execute it. Ideally, retirement coverage, like health care coverage, would be a federal effort to ensure the broadest possible participation at the lowest possible costs. Until then, California is taking on the mantle of leadership.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
