SB 1234 Summary

• Approves legislative implementation of the California Secure Choice Retirement Savings Program effective January 1, 2017, requiring the board to report that program meets Department of Labor regulations and IRS tax qualification requirements before enrollment opens.

• Requires eligible employers with 5+ employees to offer payroll deduction retirement savings arrangements within 12-36 months based on company size, unless they already provide qualified retirement plans; employers retain right to establish their own plans at any time.

• Establishes automatic employee enrollment at 3% salary contribution (adjustable 2-5% by board regulation, up to 8% with annual automatic escalation) unless employee opts out; board may increase contribution amounts subject to specified limits.

• Creates funding mechanism allowing General Fund appropriation for startup and first-year administrative costs, which the board must repay with interest; caps administrative costs at 1% of total program fund starting 6 years after implementation.

• Defines in-home supportive services providers as eligible employers if Director of Social Services and Director of Finance certify inclusion meets legal requirements, identifies appropriate employer of record, and creates no state financial liability.