Auto-IRA Ruling Poised to Drive Interest in Traditional Plans

The legal battle California’s automatic retirement program CalSavers won this week could pave the way for other states considering similar legislation and even increase participation in more traditional 401(k)-style retirement plans.

The Ninth Circuit U.S. Court of Appeals on Thursday affirmed a lower court’s ruling that California’s automatic-individual retirement account program doesn’t interfere with the Employee Retirement Income Security Act, a federal law that sets minimum standards for voluntary workplace employee benefits.

CalSavers is one of eight state programs across the U.S. that automatically enroll new private-sector workers into government-backed IRAs. These programs seek to cut down on the growing ...