The "CalSavers" retirement program. (loan, live in, costs)

[kttam186290]

This sounds like a great program!

It will be for people who work for small businesses or are self-employed and want the option of paying into a retirement plan, but don't want something that is risky or shifty, such as a Wall Street plan.

The CalSavers plan will allow people to save money and then withdraw when needed. It will be self-contained and not require taxpayer funds. It will also be independent of PERS and STRS.

I love the fact that I live in a state like California where things like this are taken into consideration and the state is proactively trying to address this need.

This program isn't supposed to come online until later this year. I would actively encourage people without a retirement plan to investigate this program and see what benefit it might provide you.

Have a look:
https://www.treasurer.ca.gov/scib/

The most ambitious push to expand retirement security since the passage of Social Security in the 1930s became a reality on September 29, 2016 when Governor Jerry Brown signed Senate Bill 1234, championed by Senator Kevin de León. The California Secure Choice Retirement Savings Investment Board, chaired by State Treasurer John Chiang, is in the midst of developing and implementing the CalSavers Retirement Savings Program. The Board anticipates the Program will open with a pilot program in late-2018 and officially open for statewide enrollment in 2019.

Once implemented, the CalSavers program will ensure nearly all Californians have access to a workplace retirement savings plan. CalSavers offers employees a completely voluntary, low cost, portable retirement savings vehicle with professionally managed investments and oversight from a public, transparent board of directors.

CalSavers provides employers a way to offer their employees a retirement savings benefit without the administrative complexity, fees, or fiduciary liability of existing options for employers. Any employer with at least five employees that doesn’t already offer a workplace retirement savings vehicle will be required to either begin offering one via the private market or provide their employees access to CalSavers.

[john3232]

In theory I like the idea. However, I but don`t trust CalSavers not to start raising fees after six years especially if the enrollment numbers aren't what they project.

One big question is fees. By law, participants must bear all costs including administration and fund fees. After six years of operation, fees would be capped at 1 percent of assets, but until then there would be no limit. The program is borrowing money from the general fund to get started, but participants must repay that loan.

In Oregon, fees are about 1 percent of assets, $104 per year on a $10,000 balance. In Illinois fees are capped at 0.75 percent. Those fees are much higher than average for large 401(k) plans, but lower than average for very small plans, according to BrightScope data.

CalSavers expects to have lower fees than Illinois, given the “vast size of our target market, approximately 7 million workers,” Selenski said.
https://www.sfchronicle.com/business...n-12739753.php

[expatCA]

Originally Posted by john3232

In theory I like the idea. However, I but don`t trust CalSavers not to start raising fees after six years especially if the enrollment numbers aren't what they project.

One big question is fees. By law, participants must bear all costs including administration and fund fees. After six years of operation, fees would be capped at 1 percent of assets, but until then there would be no limit. The program is borrowing money from the general fund to get started, but participants must repay that loan.

In Oregon, fees are about 1 percent of assets, $104 per year on a $10,000 balance. In Illinois fees are capped at 0.75 percent. Those fees are much higher than average for large 401(k) plans, but lower than average for very small plans, according to BrightScope data.

CalSavers expects to have lower fees than Illinois, given the “vast size of our target market, approximately 7 million workers,” Selenski said.
https://www.sfchronicle.com/business...n-12739753.php

And what happens if it does not have enough funds when people start retiring?

[LuvSouthOC]

Originally Posted by kttam186290

This sounds like a great program!

It will be for people who work for small businesses or are self-employed and want the option of paying into a retirement plan, but don't want something that is risky or shifty, such as a Wall Street plan.

The CalSavers plan will allow people to save money and then withdraw when needed. It will be self-contained and not require taxpayer funds. It will also be independent of PERS and STRS.

I love the fact that I live in a state like California where things like this are taken into consideration and the state is proactively trying to address this need.

This program isn't supposed to come online until later this year. I would actively encourage people without a retirement plan to investigate this program and see what benefit it might provide you.

Some kind of universal savings program is indeed a necessity for folks who don't have traditional retirement accounts. People simply must be forced to save. I am a super saver and investor. It becomes an obsession, I admit. As we get older, it becomes critical.