California Shows How to Fill the Retirement Security Void

Reid Cramer wrote for the Hill about California's new state-run retirement plan:

California Gov. Jerry Brown (D) just signed a bill that will provide a major assist to workers who need help saving for their future. By creating the California Secure Choice Retirement Savings Program, the state is creating its own 401(k)-type plan and almost everyone in the workforce who doesn't have his or her own plan already will be automatically enrolled. In California, that's almost 7 million workers, many of whom aren't setting aside any money to augment their Social Security benefits.

With Secure Choice, these workers will have up to 5 percent of their income deducted from their paycheck and deposited into a personal account. They can opt out if they choose. If they stay in, they can benefit by participating in a pooled fund with low fees, economies of scale and a mandate for strong consumer protections that is designed to maximize retirement security.