1 1 universal voluntary retirement accounts: a financially secure retirement olivia calderon new...
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Universal Voluntary Retirement Accounts:Universal Voluntary Retirement Accounts:A Financially Secure Retirement A Financially Secure Retirement
Olivia CalderonNew America Foundation
California Asset Building Program
Sargent Shriver National Center on Poverty LawDecember 14, 2009
Retirement Savings Webinar
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New America Foundation
A national nonprofit, nonpartisan policy institute, based in Sacramento and in Washington DC.
The Asset Building Program develops and advances a range of policy proposals at the national, state, and local level that aim to broaden the middle class and help people permanently exit poverty.
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Discussion Topics
California Overview
Golden Dream Account
Assembly Bill 125
Challenges and Opportunities
Lessons Learned
Next Steps
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Why Promote Retirement Savings in California?
Six million Californians, roughly 43 percent of the state’s workforce, have jobs without a pension or a retirement savings plan to supplement Social Security
Forty percent of today’s baby boomers rely on Social Security benefits for more than 90 percent of their retirement income.
Social Security payments alone, which average to $1,081 per month in California, will not be enough to sustain Californians in their retirement.
Twenty-five percent of California households do not have enough savings to survive at the poverty level for 3 months if their income were interrupted.
California private sector workers need a seamless, lifelong retirement savings system to build their savings.
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What is the Golden Dream Account?
Create an easy way for workers to save for retirement through payroll deduction
Provide small businesses a low-cost,
easy retirement plan to offer their employees
Use California’s tax filling and public pension management program to expand retirement coverage
Financed through accountholder fees
A voluntary, portable retirement savings account for private sector workers not covered by a retirement savings plan on the job.
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Assembly Bill 125 (De Leon)The California Employees Savings Program (CalESP)
Authorize CA Public Employees Retirement System (CalPERS) to develop and administer the Program
Provide portable, individually owned, IRA accounts to CA workers without access to a workplace retirement plan
Allow workers to match employees contributions through SIMPLE IRAs
Voluntary accounts for both employees and businesses
Employers’ only obligation would be to transfer workers’ contributions to the account through the state payroll tax system
Financed through accountholder fees.
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California AB 125 Coalition
AARP Advanced Composite Products and
Technology American Federation of State, County and
Municipal Employees Asset Policy Initiative of California
Association of California School Administrators
CA ACORN CA Communities United Institute CA Council
of Land Trusts CA Faculty Association CA Small Business Association City of Los Angeles City of San Francisco Earned Assets Resource
Network Fraser Communications
Golden Gate Restaurant Association Greenlining Institute New Economics for Women Oakland Metropolitan Chamber of Commerce Plumbing-Heating-Cooling Contractors of CA Sacramento Asian Pacific Chamber of
Commerce San Francisco Council of District Merchant
Associations San Francisco Chamber of Commerce San Francisco Small Business Advocates San Francisco Works Small Business California Small Business Majority Small Business Network Small Manufacturers Association of CA
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Challenges
With challenges come opportunities:
CA Budget Deficit
Opposition: Securities Industry Policy Design
General Awareness
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Opportunities
On the way to building savings:
National Auto-IRA
Bipartisan Effort Support: Small Business Media Coverage
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Key Lessons Learned
Do your homework
Prepare cost-benefit analysis
Know what’s up in other states and share it
Provide political cover by generating broad based support from the small business community
Publish articles and do presentations
Show how the proposed policy is consistent with national and other state policy efforts
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Guiding Principles to Garner Business & Labor Support
Small Business
Offer a voluntary opportunity to help their employees secure their financial future.
Provide a low-cost, easy way to offer a retirement savings plan to workers.
Eliminate complexities to offer high-quality investment options to employees.
Make small businesses more competitive in recruiting and retaining employees.
Create a tax-neutral, affordable, and accessible option to promote expanded retirement security for workers.
Address the need for more small business employees to save for retirement.
Labor
Provide a supplemental retirement savings product that helps both public and private employees.
Target low- and middle-income workers who are currently not marketed to.
Educate and help workers become pro-active about saving for retirement
Require state to secure all necessary federal and regulatory approvals before program design and implementation.
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Know the Power of MediaGovernor: Open CalPERS Doors; He Touts Pension Bill Letting Private Sector Join the State System Sacramento Bee - April 9, 2008.
Bill Would Help Workers Save MoreInside Bay Area - April 10, 2008.
Intriguing Idea: CalPERS for Private SaversSacramento Bee - April 13, 2008.
An IRA for the Rest of us; CalPERS May Oversee Retirement Funds for Workers Without Pensions or 401(K)sLos Angeles Times, April 14, 2008.
A Promising AlternativeSan Jose Mercury News, April 20, 2008.
Plan to Open Up CalPERS Reflects Worry About Inadequate Saving for Retirement Sacramento Bee - April 25, 2008.
A Bigger Safety NetLos Angeles Times - May 13, 2008.
Magic of SavingsVentura County Star - May 28, 2008.
Bill Would Order CalPERS to Offer IRAsSan Francisco Chronicle - April 25,2008,
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What’s Next?
Next Steps:
Seek Federal Funding for AB 125 Educate Republican legislators
Grow state and national UVRA coalition Recruit financial institutions and chambers of
commerce to neutralize opposition.
Raise awareness through statewide regional policy briefings
Reach out to mainstream and ethnic media outlets
Deliver AB 125 to Governor’s desk in 2010
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New America Foundationwww.newamerica.net
The Retirement Security Projecthttp://www.retirementsecurityproject.org
Center for Economic and Policy Researchwww.cepr.net
Sargent Shriver National Center on Poverty Lawhttp://www.povertylaw.org
Economic Opportunity Institutehttp://www.eoionline.org
Women’s Professional Business Foundationwww.bpwusa.org
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Resources
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For more Information:
Olivia CalderonLegislative Director
California Asset Building Program, New America [email protected]
www.newamerica.net/california
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Thank you!