Calif. Democrats Propose Private Sector Pension Plan
Legislative Democrats are proposing a new retirement savings plan for California's seven million private sector workers whose employers don't provide one.
Senator Kevin de León said his bill would create a "defined benefit" plan - similar to public employee pensions - but taxpayers would not be on the hook for cost overruns.
"This is at very minimal risk," said De León. "Because most likely at minimum, I would expect that the rate would be tied to a Treasury bond rate, so you'd at least get a guaranteed return."
Employers with five or more workers who don't offer their own retirement plan would be required to enroll their employees into the new program. Those employers would not be required to contribute to the plan. Workers could opt out if they wish.
De León said Social Security payments aren't enough for most retirees to live on. He said this plan combined with Social Security would give its participants more financial stability.