The California Assembly on Thursday approved a bill that would allow private-sector workers in California to invest their retirement savings through CalPERS. The proposed California Employee Savings Program, or CalESP, would include automatic deductions from a workers pay that would go into a retirement account designed and managed by the $250.5 billion California Public Employees Retirement System, Sacramento.
Under amendments added to the bill in the Assembly, the new program will launch only if CalPERS agrees that it is financially feasible, federal agencies approve the program and state funds are provided as a startup, said Dan Reeves, chief of staff for Kevin de Leon, assistant assembly majority leader and the bills author. It is likely the state will provide CalPERS with a start-up loan that can be repaid using participants fees, he said.
The amendments appear to go in the right direction, said Pat Macht, spokeswoman at CalPERS. The CalPERS board will likely take a position on the bill in the coming months.
The bill now goes to the state Senate, which must act on it by Aug. 29, said Mr. Reeves. Gov. Arnold Schwarzenegger supports the bill.