The Sac Bee reports, that not content with only destroying the public sector of California, the Democrat state legislature will now consider a bill that seeks to force businesses with five or more employees to create personal defined benefit plans, managed by CALPers. This smells a little like Obamacare but for California private sector pensions. Can a single payer for pensions be the next fad after healthcare?
Just to show you that the rich get richer, unlike public pensions these “personal pension” assume a much lower rate of return and no taxpayer bailout in down markets. Talk about the geese and the gander
Senate Bill 1234, written by Sen. Kevin de León, D-Los Angeles, would require businesses with five or more employees to enroll them in a new “Personal Pension” defined benefit program or to offer an alternative employer-sponsored plan.
The new system’s investments would be professionally managed by CalPERS or another contracted organization. Employees would contribute about 3 percent of their wages through a payroll deduction, although they could opt out of the plan.
The fund would assume much lower investment returns than the 7.75 percent that the California Public Employees’ Retirement System says its investments will generate, de León said.
Steinberg rejected suggestions that Democrats are pushing de León’s bill to fend off pressure to enact substantial public pension changes.
“Absolutely not. We’re not running away from it,” Steinberg said, calling de León’s bill the private sector “bookend” to public pension reform measures he expects lawmakers will send to Brown before the current session ends.