New CA Bill Forces All Employees to Invest for Retirement

 

Senate leader Kevin de León has put forth a bill that would require all California companies, that have at least five employees, to offer their own retirement investment plan or enroll workers in the new California Secure Choice Retirement Savings Program. Though employees could always invest for retirement using an IRA, while getting almost the exact same benefits of the Secure Choice program, many people haven’t taken advantage. As Time Magazine says, ” .. when it comes to putting money away, an employer nudge really matters: 90% of those with workplace plans save for retirement vs. only 20% of those without one.”

What bill does:

• Requires that employers with more than 5 employees offer some kind of retirement investment plan to employees.
• Offers a way for employees to invest for retirement directly from their paycheck.
• Starts employee contributions at between 2% and 5% of their paychecks (the exact details haven’t been hammered out yet).
• Automatically enrolls employees (about 6.8 Californians) unless the employee chooses to opt out.

What the bill doesn’t do:

• Does not require employers to “match” contributions or provide funds for the retirement of employees.
• Does not assume the risk of investing (investors could lose money).
• This program does NOT provide assured payouts during retirement (it is NOT a pension plan).

San Jose’s Mercury News:

At first the money would be invested in safe, low-yield U.S. Treasury notes. After three years, the funds would likely shift to a diverse portfolio of stocks and bounds. These options would be developed by the Secure Choice Retirement Savings Investment Board. The accounts would likely be Roth IRAs, a mode that allows for tax-free withdrawals upon retirement.

The amount of money deducted from a worker’s payroll would escalate over time, up to 10 percent, but employees would be able to set the amount themselves.

Time Magazine:

All told, at least 30 states are in various stages of setting up retirement plans—some mandatory for employers and some voluntary—according to the Georgetown University Center for Retirement Initiatives.

At any rate, the Secure Choice Retirement Savings Plan is heading to an employer near you. I’m waiting to hear more about the specific details but this is coming. Do you think it will encourage more employees to invest for retirement? Head over to the Bigger Than Your Block Facebook page and give your opinion.

 

 

 

 

$10,000 Scholarship for 1st Year Law Students

From Nutka:

The MCCA Lloyd M. Johnson, Jr. Scholarship Program provides scholarship support for newly entering first year law students. The Scholarship Program will provide scholarships at $10,000 per year for up to three years. The total commitment per student is up to $30,000. In addition, several students will also receive a one-time award of $10,000 to assist with their first year expenses. MCCA intends to foster mentoring opportunities for the selected scholars as well as assist in the placement of the winners in paid summer internship positons with corporate law departments during the summer immediately following successful completion of their first year of law school.

Applicants must be U.S. citizens and able to show proof of same, if requested. Applicant must show proof of his/her acceptance into a U.S. accredited law school on or before the application deadline (to start in fall 2009). Applicant must have an interest in corporate law, including working in a corporate law department and/or law firm. Applicant must have an interest in diversity. Applicant must be financially disadvantaged and have completed the FAFSA and provide additional documents as requested. Applicant must demonstrate community service and leadership qualities. Applicant must have earned an undergraduate or graduate cumulative g.p.a. of 3.2 or higher. Applicant must be enrolled in law school on a FULL-TIME basis in the fall 2009.
Program is OPEN TO ALL U.S. CITIZENS.

Online application closes on June 1.