Designing California’s Secure Choice Savings Program: Policy Considerations for Building an Automatic and State-Based Savings Platform

This paper aims at addressing the core policy issues in building an automatic and state-based savings program. It seeks to answer the questions put forward by the California Secure Choice Retirement Savings Investment Board about implementing the California Choice Retirements Savings program. This program is an initiative that targets at creating retirement accounts for 6.3 million private sector workers throughout the state who currently lack access to an employer-sponsored retirement plan. The paper covers the following sections in detail:

• Identification of the core policy issues and shortcomings of the program;
• Recommendations for a plan structure that would best meet the statutory goals and objectives of the program;
• Suggestions on the plan, design, and features of the program. This section discusses the required level of contribution, automatic escalation, plan design, and elements to be incorporated to minimize “pre-retirement” leakages from the program;
• Recommendations on the appropriate cost and fees of the program with a focus on ensuring transparency of fee and expense information available to the board and the participants in the program.