CA SB1297

Authorizes state and local public employers to make automatic payroll deductions for employee contributions to supplemental retirement savings plans (401(k), 403(b), 457, and IRA plans) through automatic enrollment and automatic escalation provisions.

Requires employers offering automatic enrollment to establish a default investment option that is a qualified default investment alternative under federal regulations, imposes no withdrawal fees or surrender charges, and provides employees quarterly opportunities to change investments and annual notice of actual investments made.

Grants employers liability protection for default investment decisions if they comply with notice and opt-out requirements, including a 30-day pre-enrollment opt-out period and a 90-day elective withdrawal period after first contribution with no restrictions or fees.

Prohibits automatic enrollment deductions for represented employees without a collectively bargained memorandum of understanding or collective bargaining agreement, and prevents employers from contributing at higher rates to non-represented or managerial employees than to represented employees in related classifications.

Prohibits vendors selected for the default investment plan from marketing other products to participants and prohibits employers and governing body members from receiving compensation from vendors in exchange for promoting vendor products.