California Secure Choice Retirement Savings Investment Board, Sacramento, hired Newton Investment Management North America to offer a balanced ESG investment option for the CalSavers Retirement Savings Program, said Katie Selenski, CalSavers executive director, in an email.
Newton's selection was made following an RFP launched in December. The board had originally solicited ESG proposals as part of the program's record keeper and investment manager search in May but failed to find a suitable ESG fund. The hire brings the total number of investment options in the CalSavers plan to five.
Newton's ESG investment option is a balanced fund, composed of 60% active ESG equity, sustainable global equity strategy run by Newton, and 40% passive ESG bond strategy subadvised by Mellon Investments. The fund cost is 15 basis points.
The CalSavers program is a defined contribution plan for private-sector workers in California who do not have access to a retirement plan sponsored by their employers. CalSavers' pilot phase began in November.
Under California state law, any employer with at least five employees that doesn't already offer a workplace retirement savings vehicle is required to offer one either through the private market or by providing employees with access to CalSavers. CalSavers is sustained by participant fees with no cost to state taxpayers or participating employers.
CalSavers consultant Meketa Investment Group assisted.
Separately, CalSavers staff reported to the board at its meeting Monday that the plan has its first funded accounts, Ms. Selenski said. The very first payrolls from its early pilot employers started to process in January, bringing plan assets to around $10,000. Half of the first wave of pilot employers have not yet started payroll deductions. The first wave of the pilot includes 27 employers; the second wave is expected in late March, she said.