BILL ANALYSIS Ó
SB 923
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Date of Hearing: August 31, 2012
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
SB 923 (De Leon) - As Proposed to be Amended: August 31, 2012
SENATE VOTE : (vote not relevant)
SUBJECT : Retirement savings plans.
SUMMARY : Enacts provisions of law related to the proposed
California Secure Choice Retirement Savings Program (Program) to
operate as a state-administered retirement savings plan for
private sector workers who do not participate in any other type
of employer-sponsored retirement savings plan. The main bill
establishing the Program is SB 1234 (De Léon). Specifically,
this bill :
1)Adds two additional members (for a total of nine) to the
proposed California Secure Choice Retirement Savings
Investment Board (Board), to be appointed by the Governor.
2)Provides that the Board shall not open the Program for
enrollment until a subsequent authorizing statute is enacted
that expresses the approval of the Legislature for the Program
to be fully implemented.
3)Makes this bill contingent on the enactment of SB 1234 (De
Léon).
FISCAL EFFECT : Unknown
COMMENTS : Senate Bill 1234 (De Léon), currently pending before
the Legislature, proposes to establish a supplemental retirement
savings program for California's private sector workers that do
not have access to retirement plans through their jobs. This
program would be known as the California Secure Choice
Retirement Savings Program (Program). The author states that
the Program created by SB 1234 would provide a reliable,
affordable and completely portable retirement savings plan for
the millions of Californians without access to a workplace
retirement plan.
Opponents of SB 1234, including the Securities Industry and
Financial Markets Association, argue that California already
SB 923
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faces hundreds of billions of dollars in unfunded pension
liability for its public sector workers. They contend that now
is not the time for the state to create and assume liability for
any new plan for private sector employees. Moreover, they
contend that SB 1234 is unnecessary as California already has a
robust and highly competitive retirement savings market.
This bill seeks to make two additional changes to the Program
proposed under SB 1234. First, this bill would add two
additional members to the proposed California Secure Choice
Retirement Savings Investment Board, to be appointed by the
Governor. Second, this bill would provide that the Board shall
not open the Program for enrollment until a subsequent
authorizing statute is enacted that expresses the approval of
the Legislature for the Program to be fully implemented.
This bill would make these provisions contingent upon the
enactment of SB 1234.
For a more thorough discussion of the issues raised by this
proposal, please see this Committee's policy hearing analysis of
SB 1234.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091