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Schwarzenegger backs opening PERS to private sector
By John Hill - jhill@sacbee.com
Last Updated 5:22 pm PDT Tuesday, April 8, 2008
Gov. Arnold Schwarzenegger says opening PERS to the private sector would help both businesses and employees. Brian Baer / bbaer@sacbee.com
Gov. Arnold Schwarzenegger announced Tuesday that he will back a proposal to open the California Public Employees Retirement System to the private sector.
Schwarzenegger issued a statement before an afternoon press conference held by Assemblyman Kevin de León, D-Los Angeles, to announce the plan. De León's Assembly Bill 2940 would allow low- and moderate-income Californians whose employers don't offer retirement savings plans to put money into the California Employee Savings Program.
Employers without retirement plans could also participate.
"This legislation will help make businesses more competitive, without costing them anything, and will help employees save for their retirement, without costing taxpayers anything either," Schwarzenegger said.
The retirement plan, unlike 401(k) plans, could be taken by the worker from job to job. If the plan is approved by the Internal Revenue Service, CalPERS would administer it with fees paid by the account holders, at no expense to taxpayers.
Several other states have considered similar programs. But de León's office said California would be the first to put one in place.
Information provided by de León's office said the bill is motivated by low rates of retirement savings among California workers. Forty-three percent of workers, for instance, work at jobs that don't offer retirement savings plans or pensions.
In the original bill, only low- and moderate-income workers would have been eligible to participate. But de León said Tuesday that the bill is being revised to eliminate income requirements.
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