California is paving a new way for employers to help with the retirement crisis using the new California Secure Choice Retirement Plan. This is a state sponsored retirement account for the employees of small businesses that traditionally could not afford to provide employees with a retirement plan. The plan, which Governor Jerry Brown has signed into law, will allow millions of Californians to start saving toward their retirement. If others states follow California's lead, Fortune notes, this type of plan could help alleviate the retirement crisis in the US.
The California program provides access for private sector employees of small businesses (with 5 or more employees) with the opportunity to participate in low-risk, low cost, portable retirement saving and investment plans. The program also requires that employers provide automatic enrollment, as well as direct payroll deductions.