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On July 16, State Senator Kevin de Leon spoke to the SEIU 721 Secure Retirement Committee about the retirement savings crisis we are facing in our nation and what we can do about it.
6.3 million Californians do not have access to a retirement plan at work. Once they retire, Social Security payments will average around $1,181/month, which is hardly enough money. A 2012 study by the EBRI found that a third of Americans aged 45 to 54 had saved nothing for retirement. And many who have saved will end up dipping into 401(k)s to send children to school or care for aged parents. Sound familiar?
The retirement crisis drove de Leon to create the California Secure Choice Retirement Savings Trust (SB 1234) which Governor Brown signed last fall. The savings program is a portable and reliable retirement plan that will serve as a modest supplement to Social Security. SB 1234 is modeled after Scholar Share, California’s successful 529 College savings program.
“Hard-working Americas should not be forced into poverty when they retire. The California Secure Choice Retirement Savings Trust might be able to help us address our nation’s retirement crisis”
– John Balta, LA County Social Worker
SB 1234 takes voluntary contributions from employees and deposits them into a professionally-managed retirement fund. Unlike employer-sponsored retirement plans such as 401(k)s, employers participating in the California Secure Choice Retirement Savings Program would not bear any fiduciary responsibility and would not be required to pay administrative fees or comply with federal quarterly-reporting mandates.
Our current retirement system has left us weaker and poorer as we approach retirement. SB 1234 goes a long way to address the impending crisis of millions retiring into poverty.
Check out more pictures from the event here: