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RELEASE: 6.3 Million Californians Have No Workplace Retirement Plan Access
New Study Reinforces Need for SB1234
Highlights Retirement Plan Shutout of Lower-Income Earners
SACRAMENTO, CA – Wall Street has basically ignored millions of Californians when it comes to engaging them in retirement planning, according to a study released today by the UC Berkeley Labor Center, emphasizing the need for Senate Bill 1234 (SB 1234) – the California Secure Choice Retirement Savings Trust – introduced by Senator Kevin de Leòn (D-Los Angeles) and co-authored by California Senate President Pro Tempore Darrell Steinberg (D-Sacramento).
The study found that 6.3 million Californians, mostly lower and middle-income workers, have no access to a retirement plan at work. Seventy-five percent of workers make less than about $46,000 a year.
“SB 1234 addresses this population by providing them a portable and reliable retirement plan that will serve as a modest supplement to Social Security,” said Senator De Leòn. “If we don’t offer this, most of these people will retire into poverty putting a further strain on our already scarce public resources.”
According to the study, the typical California private sector worker, who lacks access to a workplace retirement plan, will receive Social Security benefits equal to just 50-to-60 percent of the amount needed to pay for basic expenses like food, housing, and health care. The report was done by Nari Rhee, a researcher at the Center. It expands on a report she did in October, 2011 that found nearly half of California workers are on track to retire in or near poverty.
“For most people, retirement security is not about living in luxury, nor is it about just surviving; it is about having adequate resources to enjoy their families and interests after a lifetime of hard work while they are still in good enough health to do so,” Rhee stated.
With an already overstrained budget, the state faces catastrophic budget consequences if middle-income Californians are forced to retire in poverty. SB 1234 empowers people to take personal responsibility for their own retirement without a cost to taxpayers.
The report can be found here.
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