BILL NUMBER: SB 1234 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 27, 2012
INTRODUCED BY Senators De León and Steinberg
(Principal coauthor: Assembly Member Furutani)
( Coauthors: Assembly Members
Allen, Blumenfield, and Solorio
)
FEBRUARY 23, 2012
An act to add Section 20139 to, and to add Title 21 (commencing
with Section 100000) to, the Government Code, and to add
Section 1088.9 to the Unemployment Insurance Code, relating to
pensions retirement savings plans ,
and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 1234, as amended, De León. Pensions.
Retirement savings plans.
Existing federal law provides for tax-qualified retirement plans
and individual retirement accounts or individual retirement annuities
by which private citizens may save money for retirement.
This bill would establish enact the
Golden State California Secure
Choice Retirement Savings Trust Act, which would create the
Golden State California Secure
Choice Retirement Savings Trust that would
to be administered by the Golden State
California Secure Choice Retirement Savings
Investment Board, which would also be established by the bill. The
bill would require eligible employers, as defined, and would
authorize other employers to enroll eligible employees, as defined,
into an employer-sponsored retirement plan or pension plan, as
specified, offered by the trust, or a personal pension in the case of
a nonparticipating employer, to offer a payroll
deposit retirement savings arrangement so that eligible employees, as
defined, could contribute a portion of their salary or wages to a
retirement savings plan account in the
California Secure Choice Retirement Savings Plan, as
specified. The bill would require eligible employees to
participate in the plan, unless the employee opts out of the plan, as
specified. The bill would require a specified percentage of
the annual salary or wages of an eligible employee
participating in the retirement or pension plan to
be deposited in the Golden State California
Secure Choice Retirement Savings Trust, which would
be segregated into a program fund and an administrative fund, both of
which would be continuously appropriated to the board for purposes
of the act. The bill would limit expenditures from the administrative
fund, as specified. The bill would also require the board to
establish a Gain and Loss Reserve Account within the program fund.
The bill would require the Employment Development Department to
modify the California Employee's Withholding Allowance
Certificate create an exemption certificate to
create an option for employees to elect to opt out of an
employer-sponsored retirement or pension the
plan. The bill would , commencing January 1, 2014, require
the Employment Development Department to assess a penalty on any
eligible employer that fails to offer its eligible employees
a retirement or pension plan option make the plan
available to eligible employees , as specified. The bill also
makes would make a statement of
legislative findings.
The bill would provide that the operational provisions of the
Golden State California Secure
Choice Retirement Savings Trust Act shall be operative only if
sufficient funds are made available through a nonprofit or private
entity or federal funding, as specified, to allow the board to study,
develop, and obtain the approvals necessary to implement the program
and the board determines that the program can be self-sustaining.
Existing law establishes the Board of Administration of the Public
Employees' Retirement System and vests the board with various powers
and duties.
This bill would authorize the that
board to administer funds in the Golden State
California Secure Choice Retirement Savings Trust,
as specified.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares the following:
(a) California workers without access to an employer-sponsored
retirement plan need a seamless, lifelong savings system, providing
them with the opportunity to build their assets and helping them to
attain their future financial stability through a secure, portable
pension retirement savings plan .
(b) According to recent data by the University of California,
Berkeley, Center for Labor Research and Education, middle class
families in California are at significant risk of not having enough
retirement income to meet even basic expenses, as nearly 50 percent
of middle-income California workers will retire at or near poverty.
(c) The lack of sufficient retirement savings poses a significant
threat to the state's already-strained safety-net programs and also
threatens to undermine California's fiscal stability and ongoing
economic recovery.
(d) The looming retirement security crisis exacerbates the state's
high unemployment rate, as seniors are forced to work longer and
fewer jobs are available for younger workers trying to enter the
workforce.
(b)
(e) Providing California workers with a guaranteed
retirement income to supplement social security, traditionally funded
by stable employer contributions via a defined benefit,
employer-based pension plan, is optimal to ensure that workers
accumulate the benefits they need for a secure retirement. California
must pursue guaranteed replacement income programs, including
defined benefit plans, for all working Californians. Establishing and
offering a defined benefit plan universal
retirement savings plan to provide a vital supplement to social
security income would be an important step toward ensuring the
retirement security for all working Californians.
(c)
(f) Though employer-sponsored guaranteed retirement
income programs are valuable savings tools for workers, given the
changing needs and work habits of California's workers, they alone
are insufficient to afford workers a secure retirement. California
workers need additional retirement savings options to ensure their
retirement security.
(d)
(g) Private individuals have limited access to
attractive financial products that allow them to convert their
savings into secure, lifelong retirement income.
(h) Employers in the private sector that want to offer a
retirement savings plan for their employees often face significant
barriers in setting up their own workplace plans. In addition to the
costs of hiring service providers and paying fees, employer-sponsored
plans can be complex to maintain and administer, and they are
subject to an array of rules and regulations, including fiduciary
responsibility.
(e)
(i) In creating an additional retirement savings
program for its workers, California would supplement existing savings
options, thus assisting California's working men and women to save
for retirement. This program would be funded by the program's
participants without incurring liabilities to the state .
(f)
(j) The Golden State California
Secure Choice Retirement Savings Trust established by this act
will promote expanded retirement security for working Californians.
(g)
(k) The implementation and effectuation of the
Golden State California Secure Choice
Retirement Savings Trust constitutes the carrying out of a
valid and vital public purpose.
SEC. 2. Section 20139 is added to the Government Code, to read:
20139. The board shall have the power to administer funds in the
Golden State California Secure
Choice Retirement Savings Trust pursuant to a contract with the
Golden State California Secure
Choice Retirement Savings Investment Board as provided in Title
21 (commencing with Section 100000) and to help all California
workers to plan and save for retirement.
SEC. 3. Title 21 (commencing with Section 100000) is added to the
Government Code, to read:
TITLE 21. THE GOLDEN STATE CALIFORNIA
SECURE CHOICE RETIREMENT SAVINGS TRUST ACT
100000. For purposes of this title the following definitions
shall apply:
(a) "Board" means the Golden State
California Secure Choice Retirement Savings
Investment Board.
(b) "California Secure Choice Retirement Savings Plan" or "plan"
means a retirement savings plan offered by the California Secure
Choice Retirement Savings Trust.
(b)
(c) (1) "Eligible employee" means
a person who is employed by an eligible employer.
(2) "Eligible employee" does not include:
(A) Any employee covered under the federal Railway Labor Act (45
U.S.C. Sec. 151), or any employee engaged in interstate commerce so
as not to be subject to the legislative powers of the state, except
in so far as application of this title is authorized under the United
States Constitution or laws of the United States.
(B) Any employee covered by a valid collective bargaining
agreement that expressly provides for an employee pension benefit
plan for those employees as defined in the federal Employee
Retirement Income Security Act (29 U.S.C. Sec. 1002).
(c)
(d) "Eligible employer" means a person or entity
engaged in a business, industry, profession, trade, or other
enterprise in the state, whether for profit or not for profit,
excluding the federal government, the state, any county,
any municipal corporation, or any of its the
state's units or instrumentalities, that has five or more
employees and that satisfies the requirements to establish or
participate in a payroll deposit pension
retirement savings arrangement.
(d)
(e) "Participating employer" means an eligible employer
that maintains or participates in a personal pension
provides a payroll deposit retirement savings
arrangement provided for by this title for eligible employees.
(e)
(f) "Payroll deposit pension
retirement savings arrangement" means an arrangement by which
an employer makes its payroll system available to employees
as a conduit for transferring salary reduction to
remit payroll deduction contributions to a defined
benefit retirement savings plan.
(f) "Personal Pension" means a defined benefit retirement plan
offered by the Golden State Retirement Savings Trust.
(g) "Stated interest rate" means the
rate of interest creditable to plan accounts as determined by the
board pursuant to subdivision (c) of Section 100005.
(g)
(h) "Trust" means the Golden State
California Secure Cho ice Retirement
Savings Trust established by this title.
100002. (a) There is hereby created the Golden State
California Secure Choice Retirement
Savings Investment Board, which shall consist of the Treasurer, the
Director of Finance, the Controller, an individual with retirement
savings and investment expertise appointed by the Senate Committee on
Rules, a small business representative and a public member each
appointed by the Governor, and an employee representative appointed
by the Speaker of the Assembly. The Treasurer shall serve as chair of
the board.
(b) The board shall annually prepare and adopt a written statement
of investment policy. The board shall consider the statement of
investment policy and any changes in the investment policy at a
public hearing.
(c) The board shall approve an investment management entity or
entities. Not later than 30 days after the close of each month, the
board shall place on file for public inspection during business hours
a report with respect to investments made pursuant to this section
and a report of deposits in financial institutions. The investment
manager shall report the following information to the board within 20
days following the end of the each month:
(1) The type of investment, name of the issuer, date of maturity,
and the par and dollar amount invested in each security, investment,
and money within the program fund.
(2) The weighted average maturity of the investments within the
program fund.
(3) Any amounts in the program fund that are under the management
of private money managers.
(4) Any amounts in the program fund that are under the management
of the Board of Administration of the Public Employees' Retirement
System.
(5) The market value as of the date of the report and the source
of this valuation for each security within the program fund.
(6) A description of compliance with the statement of investment
policy.
100004. (a) There is hereby established a retirement savings
trust known as the Golden State California
Secure Choice Retirement Savings Trust to be
administered by the board for the purpose of promoting greater
retirement savings for California private employees in a convenient,
voluntary, low-cost, and portable manner. The Golden State
California Secure Choice Retirement
Savings Trust, as a self-sustaining trust, shall pay all costs of
administration out of earnings on moneys on deposit therein.
(b) The board shall segregate moneys received by the
Golden State California Secure Choice
Retirement Savings Trust into two funds, which shall be identified
as the program fund and the administrative fund. Notwithstanding
Section 13340, moneys in the trust are hereby continuously
appropriated, without regard to fiscal years, to the board for the
purposes of this title.
(c) Moneys in the program fund may be invested or reinvested by
the Treasurer or may be invested in whole or in part under contract
with the Board of Administration of the Public Employees' Retirement
System, or private money managers, or both, as determined by the
board.
(d) Transfers may be made from the program fund to the
administrative fund for the purpose of paying operating costs
associated with administering the trust and as required by this
title. On an annual basis, expenditures from the administrative fund
shall not exceed more than 1 percent of the total program fund. All
costs of administration of the trust shall be paid out of the
administration administrative fund.
100004.5. (a) The board shall establish a segregated account
within the program fund to be known as the Gain and Loss Reserve
Account, and the board shall have sole authority over the account.
The Gain and Loss Reserve Account shall be maintained for the plan
and may be used to credit interest at the stated interest rate for
plan years in which the board determines that the stated interest
rate cannot be met from investment earnings.
(b) The board shall establish a goal for the balance of the Gain
and Loss Reserve Account and shall periodically review the
sufficiency of the reserve account based on the recommendations of
the board's actuary.
(c) The board may allocate excess earnings of the plan with
respect to assets attributable to the plan to the Gain and Loss
Reserve Account. In addition, the board may allocate any liability
gains and losses to the Gain and Loss Reserve Account. Based on an
actuarial valuation following each plan year, the board shall
determine annually the amount, if any, that is to be allocated to the
Gain and Loss Reserve Account for that plan year. In determining
whether to allocate excess earnings to the Gain and Loss Reserve
Account, the board shall consider all of the following:
(1) Whether or not the plan has excess earnings.
(2) The sufficiency of the Gain and Loss Reserve Account in light
of the goal established pursuant to subdivision (b).
(3) The amount required for the plan's administrative costs.
(4) The amount required for crediting individuals' accounts at the
stated interest rate.
(d) In determining whether to allocate liability gains and losses
to the Gain and Loss Reserve Account, the board shall consider the
matters described in paragraphs (2), (3), and (4) of subdivision (c).
100005. (a) The personal pension
California Secure Choice Retirement Savings Plan
shall include, as determined by the board, one or more payroll
deposit cash balance pension retirement
savings plan arrangements.
(b) Pursuant to the authority granted under this title, the board
may establish the following:
(1) Prototype or master and prototype plans.
(2) Multiple employer plans.
(3) Group administrative service arrangements that allow eligible
employers to achieve economies of scale with respect to their
retirement savings arrangements relating to investment, accounting,
payroll processing, employee communications, and investor education.
(4) Custodial or trustee arrangements for payroll deposit programs
or for other plans.
(b) Individual accounts under the California Secure Choice
Retirement Savings Plan shall be nominal accounts. Individual
contributions and any employer contributions on behalf of the
individual that are specifically identified as creditable to the plan
shall be treated as credits to the individual's California Secure
Choice Retirement Savings Plan account, together with interest
credited at the stated interest rate and any additional earnings
credited thereon. The balance of the credits in an individual's
account shall determine the amount to which the individual is
entitled under the plan upon termination of coverage by the plan. The
individual shall not have the right or claim to any specific assets
of the account, program, plan, or program fund.
(c) (1) Prior to July 1 of the initial plan year, and prior to the
beginning of each plan year thereafter, the board shall adopt a plan
amendment with respect to the plan to declare the stated rate at
which interest shall be credited to plan accounts for the following
plan year.
(2) Interest shall be credited to plan accounts and shall be
computed at the stated interest rate on the balance of credits in an
individual's account and shall be compounded daily.
(d) An individual's retirement savings benefit under the plan
shall be an amount equal to the balance of the credits in the
individual's plan account on the date the retirement savings benefit
becomes payable.
100006. (a) The board, in the capacity of trustee, shall have the
power and authority to do all of the following:
(1) Make and enter into contracts necessary for the administration
of the trust.
(2) Adopt a seal and change and amend it from time to time.
(3) Cause moneys in the program fund to be held and invested and
reinvested.
(4) Accept any grants, gifts, legislative appropriation, and other
moneys from the state, any unit of federal, state, or local
government or any other person, firm, partnership, or corporation for
deposit to the administrative fund or the program fund.
(5) Appoint a program administrator and determine the duties of
the program administrator and other staff as necessary and set their
compensation.
(6) Make provisions for the payment of costs of administration and
operation of the trust.
(7) Employ staff.
(8) Retain and contract with the Board of Administration of the
Public Employees' Retirement System, private financial institutions,
other financial and service providers, consultants, actuaries,
counsel, auditors, third-party administrators, and other
professionals as necessary.
(9) Procure insurance against any loss in connection with the
property, assets, or activities of the trust , and secure
private underwriting to insure the retirement savings benefit that is
guaranteed to plan participants .
(10) Procure insurance indemnifying each member of the board from
personal loss or liability resulting from a member's action or
inaction as a member of the board.
(11) Set minimum and maximum investment levels.
(12) Collaborate and cooperate with the Board of Administration of
the Public Employees' Retirement System, private financial
institutions, service providers, and business, financial, trade,
membership, and other organizations to the extent necessary or
desirable for the effective and efficient design, implementation, and
administration of the program and to maximize outreach to eligible
employers and eligible employees.
(13) Cause expenses incurred to initiate, implement, maintain, and
administer the program to be paid from contributions to, or
investment returns or assets of, the program or plans or arrangements
established under the program, to the extent permitted under state
and federal law.
(14) Facilitate compliance by the defined benefit
retirement savings plans or arrangements
established under the program with all applicable requirements for
the plans under the Internal Revenue Code of 1986, including tax
qualification requirements or any other applicable law and accounting
requirements, including providing or arranging for assistance to
plan sponsors and individuals in complying with applicable law and
tax qualification requirements in a cost-effective manner.
(15) Carry out the duties and obligations of the Golden
State California Secure Choice
Retirement Savings Trust pursuant to this title and exercise any and
all other powers as may be reasonably necessary for the effectuation
of the purposes, objectives, and provisions of this title pertaining
to the trust.
(b) The board shall adopt regulations it deems necessary to
implement this title consistent with the federal Internal Revenue
Code and regulations issued pursuant to that code to ensure that this
program meets all criteria for federal tax-deferral or tax-exempt
benefits, or both.
100008. In addition to the powers and authority granted to the
board pursuant to Section 100006, the board shall have the power and
authority to do the following:
(a) Cause the pension retirement savings
plans or arrangements established under the program to be
designed, established, and operated, in a manner consistent with all
of the following:
(1) In accordance with best practices for retirement savings
vehicles.
(2) To maximize participation, saving, and sound investment
practices, and appropriate selection of default investments.
(3) With simplicity, ease of administration for participating
employers, and portability of benefits.
(b) Minimize costs by assisting or facilitating the pooling of
small employers and individuals in purchasing retirement plans or
arrangements, and investments, and through economies of scale,
standardization, designation of investment types, and other measures.
(c)
(b) Arrange for collective, common, and pooled
investment of assets of the pension
retirement savings plans or arrangements, including investments
in conjunction with other funds with which those assets are
permitted to be collectively invested, with a view to saving costs
through efficiencies and economies of scale.
(d)
(c) Explore and establish investment options that offer
employees guaranteed returns on contributions and the conversion of
pension retirement savings account
balances to secure retirement income without incurring debt or
liabilities to the state .
(e)
(d) Disseminate educational information concerning
saving and planning for retirement.
(f)
(e) Disseminate information concerning the tax credits
available to small business owners for establishing new retirement
plans and the federal saver's tax credit available to lower and
moderate-income households for saving in plans or arrangements.
(g)
(f) Submit progress and status reports to participating
employers and eligible employees.
(h)
(g) If necessary, determine the eligibility of an
employer, employee, or other individual to participate in the
program.
(i)
(h) Evaluate and establish the process by which an
eligible employee of an eligible employer is able to contribute a
portion of his or her paycheck salary or
wages to a personal pension the plan
for automatic deposit of those contributions and
require the participating employer provides a payroll
deposit retirement savings arrangement to forward the employee
contribution and related information to the program or its agents.
This may include, but is not limited to, financial services companies
and third-party administrators with the capability to receive and
process employee information and contributions for payroll
deduction pension deposit retirement savings
arrangements or other plans or arrangements authorized by this title.
(j)
(i) Allow participating employers to use the program to
contribute to the account on their employees' behalf or match their
employees' contributions.
(k)
(j) Evaluate and establish the process by which an
individual or an employee of a nonparticipating employer may
establish and make contributions to a personal pension
the plan .
100010. (a) (1) After the
board opens the personal pension program plan
for enrollment, any eligible employer may
automatically enroll eligible choose to
participate and make the plan available to employees
into an employer-sponsored retirement plan or the personal
pension, provide each employee with the option to opt out of that
retirement plan or pension, and permit employees who choose not to
opt out to use their payroll system to direct a portion of their
earnings to the retirement plan or personal pension .
(2) After the board opens the personal pension program for
enrollment, any employer with four or fewer employees that otherwise
meets the definition of an eligible employer, as defined in
subdivision (d) of Section 100000, may elect to automatically enroll
its employees into an employer-sponsored retirement plan or the
personal pension, provide each employee with the option to opt out of
that retirement plan or pension, and permit employees who choose not
to opt out to use their payroll system to direct a portion of their
earnings to the retirement plan or personal pension.
(b) Beginning three months after the board opens the
personal pension program plan for enrollment,
eligible employers with more than 100 eligible employees
shall automatically enroll those employees into an employer-sponsored
retirement plan or the personal pension, provide each employee with
the option to opt out of that retirement plan or pension, and permit
employees who choose not to opt out to use their payroll system to
direct a portion of their earnings to the retirement plan or personal
pension. that do not offer an employer-sponsored
retirement plan shall make the plan available to eligible employees,
and all eligible employees shall be enrolled in the plan, unless the
employee elects not to participate in the plan as provided in
subdivision (e) .
(c) Beginning six months after the board opens the
personal pension program plan for enrollment,
eligible employers with more than 50 eligible employees
shall automatically enroll those employees into an employer-sponsored
retirement plan or the personal pension, provide each employee with
the option to opt out of that retirement plan or pension, and permit
employees who choose not to opt out to use their payroll system to
direct a portion of their earnings to the retirement plan or personal
pension. that do not offer an employer-sponsored
retirement plan shall make the plan available to eligible employees,
and all eligible employees shall be enrolled in the plan, unless the
employee elects not to participate in the plan as provided in
subdivision (e).
(d) Beginning nine months after the board opens the
personal pension program plan for enrollment,
all other eligible employers shall automatically enroll
their eligible employees into an employer-sponsored retirement plan
or the personal pension, provide those employees with the option to
opt out of that retirement plan or pension, and permit employees who
choose not to opt out to use their payroll system to direct a portion
of their earnings to the retirement plan or personal pension.
that do not offer an employer-sponsored retirement
plan shall make the plan available to eligible employees, and all
eligible employees shall be enrolle d in the plan, unless
the employee elects not to participate in the plan as provided in
subdivision (e).
(e) An eligible employee may elect to opt out of the plan by
making a notation on the exemption certificate produced by the
Employment Development Department. If the employee elects to opt out,
the employee shall, after 24 months, be enrolled in the plan, unless
the employee again elects to opt out as provided in this
subdivision.
(e)
(f) Employers shall retain the option at all times to
set up any sort type of retirement
plan, such as a defined benefit plan or a 401(k) plan, instead of
the personal pension making the plan
available to its eligible employees .
(f) An eligible employee shall be enrolled in either an
employer-sponsored retirement savings plan or the personal pension
pursuant to this section unless that employee elects to not
participate in that retirement plan or pension. The employee may
elect to opt out of his or her
retirement savings option by making a notation on the
California Employee's Withholding Allowance Certificate form produced
by the Employment Development Department. If the employee opts out,
the employee shall, after 24 months, be automatically enrolled in
either an employer-sponsored retirement savings plan or the personal
pension pursuant to this section unless that employee again elects to
not participate in that retirement plan or pension.
(g) An eligible employee may also terminate his or her
participation in the personal pension plan
at any time in a manner prescribed by the board and thereafter
by making a notation on the California Employee's
Withholding Allowance Certificate form exemption
certificate produced by the Employment Development Department.
(h) Unless otherwise specified by the employee, a
participating employee shall contribute 3 percent of the
employee's annual salary shall be the default amount
contributed or wages to the personal
pension plan .
(i) By regulation, the board may adjust the default
contribution amount set in subdivision (h) to no
less than 2 percent and no more than 4 percent and may vary that
default amount within that 2 percent to 4 percent
range for participating employees according to the length of time the
employee has contributed to the personal pension
plan .
100012. (a) The Employment Development Department shall assess an
eligible employer that fails to offer all of its eligible employees
an employer-sponsored retirement plan or the personal pension
pursuant to Section 10010 a penalty of one thousand dollars ($1,000)
for every eligible employee not offered the retirement option.
(b) That penalty shall not be assessed if, within 90 days of being
notified of violation of this section, the eligible employer
remedies the failure by offering all of its eligible employees either
an employer-sponsored retirement plan or the personal pension.
(c) All penalties collected by the Employment Development
Department under this section shall be deposited in the State
Treasury and credited to the General Fund.
100014. (a) The Employment Development Department shall modify
the California Employee's Withholding Allowance Certificate (Form DE
4) to create an option for an employee to note his or her decision to
opt out of utilizing either the employer-sponsored retirement
savings plan or the personal pension.
(b) In modifying the California Employee's Withholding Allowance
Certificate to add the employee retirement savings opt-out provision
pursuant to subdivision (a), the Employment Development Department
shall make the opt-out notation simple and concise and in a manner it
deems necessary to appropriately evidence the employee's
understanding that he or she is choosing not to automatically deduct
earnings to save for retirement.
100016. Participating employers shall not be liable for the
investment decisions of employees whose assets are deposited in the
personal pension plan .
100018. (a) Notwithstanding Section 10231.5, the board shall
submit an annual audited financial report, prepared in accordance
with generally accepted accounting principles, on the operations of
the Golden State California Secure
Choice Retirement Savings Trust by August 1 to the Governor,
the Controller, the State Auditor, and the Legislature ,
pursuant to Section 9795 . The annual audit shall be made by an
independent certified public accountant and shall include, but not
be limited to, direct and indirect costs attributable to the use of
outside consultants, independent contractors, and any other persons
who are not state employees.
(b) The annual audit shall be supplemented by the following
information prepared by the board:
(1) Any studies or evaluations prepared in the preceding year.
(2) A summary of the benefits provided by the trust including the
number of participants in the trust.
(3) Any other information that is relevant in order to make a
full, fair, and effective disclosure of the operations of the
Golden State California Secure
Choice Retirement Savings Trust.
100022. The board shall initially conduct a market analysis to
determine whether the necessary conditions for implementation of this
title can be met, including, but not limited to, likely
participation rates, participants' comfort with various investment
vehicles and degree of risk, contribution levels, and the rate of
account closures and rollovers. The board shall conduct this analysis
only if sufficient funds are made available through a nonprofit or
private entity, federal funding, or an annual Budget Act
appropriation. The board shall forward its findings to the Chair of
the Senate Committee on Public Employment and Retirement
Committee and to the Chair of the Assembly
Committee on Public Employees, Retirement and Social Security
Committee , pursuant to Section 9795.
100024. With the exceptions of subdivision (a) of Section 100002,
and Sections 100022 and 100026, the provisions of this title shall
become operative only if funds are made available through a nonprofit
or private entity or federal funding, in amounts sufficient to allow
the board to study, develop, and obtain the approvals necessary to
implement this title and the board notifies the Director of Finance
that, based on its market analysis, the provisions of this title can
be self-sustaining pursuant to this title.
100026. This title shall be construed liberally in order to
effectuate its legislative intent. The purposes of this title and all
of its provisions with respect to the powers granted shall be
broadly interpreted to effectuate that intent and purposes and not as
to any limitation of powers.
SEC. 4 . Section 1088.9 is added to the
Unemployment Insurance Code , to read:
1088.9. (a) The department shall have the power and duties
necessary to administer the enforcement of employer compliance with
Title 21 (commencing with Section 100000) of the Government Code.
(b) An eligible employer shall use the department's exemption
certificate filed by the eligible employee with the employer in a
form and containing that information as the department prescribes, to
create an option for an eligible employee to note his or her
decision to opt out of utilizing the California Secure Choice
Retirement Savings Plan. The department shall make the opt-out
notation simple and concise and in a manner it deems necessary to
appropriately evidence the employee's understanding that he or she is
choosing not to automatically deduct earnings to save for
retirement.
(c) For each eligible employer who, without good cause, fails to
make the California Secure Choice Retirement Savings Plan available
to all of its eligible employees pursuant to Section 100010 of the
Government Code, on or before 90 days after notice has been given to
the employer of his or her failure to comply, the department shall
assess a penalty of one thousand dollars ($1,000) for every eligible
employee not offered the retirement savings plan. The department
shall enforce this penalty as part of its existing investigation and
audit function.
(d) This section shall become operative on January 1, 2014.