Giant Step Toward Retirement Security

Secure Choice - Aug. 11, 2016Governor Brown needs to hear from you. SB 1234, a groundbreaking bill that would lay down another path to retirement security for more than 7 million California workers, was just passed in the Senate and is heading to Governor Brown’s desk for his signature. Now is the time to act!

TELL GOVERNOR BROWN: SIGN SB1234 (SECURE CHOICE)

When the bill passed the Assembly on Aug. 25, this is what the State Treasurer said:

“Today’s historic vote by the Assembly marks the biggest improvement in retirement security since the passage of Social Security in 1935. We are one step closer to providing a more comfortable retirement for generations of elderly in the decades to come. I am proud that California is leading the nation in finding a solution to one of society’s most pressing challenges — to make sure workers have a dignified retirement.”
– State Treasurer John Chiang

In related action, the U.S. Department of Labor issued a final ruling on Aug. 25 clearing the way for California and other states to develop retirement savings programs without concern of being preempted by federal law.

Nearly seven million Californians in the private sector who have no retirement savings plan at work are one step closer to achieving better retirement security thanks to the strong and steady advocacy of SEIU members over the past four years.

“I would like to personally thank all the workers and SEIU 521 members who have come out to support Secure Choice for the past 4 years. I encourage our members to get involved in our Retirement Security for All Committee (RSA).
– Matt Nathanson, SEIU 521 RSA Committee Chair & Region 2 Vice President

SEIU 521 Retirement Security for All Committee has been rooting and pushing for this legislation since its inception. Join our committee, change lives!

“SEIU is proud to have worked alongside Senate President pro Tempore Kevin de León to advance SB 1234 to Governor Brown’s desk. Our members championed this bill in the Capitol and in communities across California because every Californian who works hard over a lifetime deserves the opportunity to retire with a basic level of dignity. With Governor Brown’s signature on SB 1234, California will strike a significant blow against an epidemic of senior poverty and lift up those people most at risk: our state’s women, people in low-wage jobs, and people of color.”
– Yvonne R. Walker, SEIU Local 1000 President

Why is Secure Choice important?

  • 7.5 million California workers (about 57%) of private-sector workers in California work for an employer that does not offer a retirement plan. Of those, over 2/3 (almost 5 million) are people of color, of which nearly 3/4 (over 3.5 million) are Latino.
  • 58% (3.4 million) of female workers in California between the ages of 18-64 are not covered by workplace retirement savings plans.
  • 58% of young workers age 25-44 have projected retirement incomes below 200% of the federal poverty level (a commonly used threshold for economic hardship).
  • The average monthly Social Security retirement benefit is $1,328 as of January 2015.

Data Sources

The reason for our support from the beginning is simple: As hard as SEIU Local 521 has fought to retain our members’ public-pension retirement benefits, we are working toward a future where our members’ families, friends and neighbors also have that security. Some of the workers we represent, including child care workers, don’t have any public-pension or retirement savings plan. We believe that no hard working Californian should have to choose between working until they die or retiring in poverty, and we want a healthy, vibrant California economy where seniors can retire in dignity.

Rachel Welch, SEIU 521 COPE chair of Santa Clara and San Benito Counties“California workers without access to an employer-sponsored retirement plan need a seamless, lifelong savings system so that they may have a chance to build retirement security for themselves, at no cost to taxpayers,” said Rachel Grocha-Welch, a forensic chemist in Santa Clara County. “We applaud California’s lawmakers exploring a visionary path to help bring retirement security for all.”

Timeline: A Look Back

Secure Choice – SB 1234, co-authored and introduced by Sens. Kevin DeLeón and Darrell Steinberg on Feb. 23, 2012, established California as a leader among states in creating new retirement plans for private-sector workers. SEIU Local 521 changed the name of its “Pension Committee” to “Retirement Security Committee” and started to support it from the beginning and informed our members about the new bill.

Members at the state Capitol Aug. 8, 2012 to support SB 1234

The first version of the bill to study the concept passed the California Senate on May 30, 2012. We continued to collect personal stories and asked our members to call their Assemblymembers. We urged the Assembly Appropriation Committee to approve the bill on Aug. 8, 2012.

Our efforts paid off on Aug. 17 and the bill then went to the California State Assembly.

Wall Street executives and the mutual fund industry were lobbying furiously to defeat this bill, but fortunately lawmakers approved it on Sept. 1, 2012.

We urged Gov. Brown to sign the bill into law, which he did on Sept. 28, 2012. The new law directed the Secure Choice Board to conduct a legal and market analysis, to be paid from private contributions.

Rachel Welch spoke at the Secure Choice Board meeting on Feb. 23, 2015 thanking the board for moving forward with the feasibility study and market analysis.

Secure Choice Public Hearing

Secure Choice Public Hearing, March 3, 2016

On Jan. 11, 2016, the Secure Choice Board discussed how the fund should be invested. We encouraged the Board to pick the option that doesn’t play roulette with Wall Street, and instead focuses on guarantees for California’s future retirees. Again on March 3rd, we encouraged the board at public hearings to specifically select the safest investment option for private-sector workers, the pooled IRA with a reserve fund, that will spread risk and be more stable and capable of paying monthly benefits consistently. All our efforts paid off on March 28 when the board voted unanimously to send language to the legislature giving them the authority and the direction to explore options that include smoothing and reduce timing risk, including an investment option with a reserve fund and a mandate to seek to lower fees for participants.

The Secure Choice Retirement Plan recommended by the board passed the Senate on June 3rd, 2016. A dozen SEIU 521 members attended the public hearing on Aug. 11 in Oakland and testified in support of the bill in front of the Assembly Appropriations Committee, which then passed the bill. The California Assembly just passed the bill on Aug. 25.

What’s next?
The bill now heads to the state Senate, where it is expected to be passed and sent to the Governor next week.

SEIU Local 521 is working to strengthen our social security system, reform public pensions and help deliver retirement security for more Californians.

Get involved in our Retirement Security for All Committee (RSA)!

Media Coverage
Don’t miss the New York Times op-ed: “From California, a Better Way to Retire”

Sacramento Bee op-ed: Secure Choice Will Help Workers Save

CBS SF Bay Area: “Proposed California Retirement Plan To Aid Those Without 401k Plans”

Sacramento Bee: “Here’s how to do more than lament the plight of the poor”

Los Angeles Times: “Legislature should give the green light to state’s new retirement savings plan”

San Francisco Chronicle: After federal ruling, California on verge of creating state-run IRA

Pensions & Investments: California Assembly passes bill to implement Secure Choice

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