Courtroom upholds CalSaver’s ‘Work and Save’ pension plan
“Work and Save programs like CalSavers are some of the most critical to helping Americans without pension plans build savings and a safer future,” said Nancy A. LeaMond, AARP’s executive vice president and chief advocacy & engagement officer, on May 7 Declaration: “This will help millions – including those who work for themselves or small businesses – gain access to retirement programs.”
The three-member federal appellate body consists of two judges appointed by former President Donald Trump and one judge appointed by former President Barack Obama. The judges unanimously ruled that CalSavers is not an ERISA plan as it is created and maintained by the state, not the employer. “AARP welcomes today’s decision to maintain CalSavers, which will ensure nearly all Californians have access to workplace retirement programs,” said LeaMond.
CalSavers is an entirely voluntary employee retirement program and is different from the California Public Employees’ Retirement System (CalPERS), which manages state pensions. Savers can participate in CalSavers through their employer or on their own.
A growing movement
The court decision should give momentum to other work and save programs. More than 30 states are considering options to work and save, or are considering laws to create one.
California, Oregon, and Illinois have Work and Save programs in place with over $ 220 million in assets under management. Colorado, Connecticut, Maryland, New Jersey, and Virginia have passed auto-IRA work and save program implementation laws, but they haven’t started yet, and New York, Washington state, New Mexico, Massachusetts, and Vermont have various work and save programs adopted.
“CalSavers and similar programs across the country are key to helping Americans save for the future,” LeaMond said across the country to meet the needs of tens of millions of workers looking to save for retirement. Today’s decision makes it clear that states have the power to help their residents build strong retirement provisions. “