Auto-IRA Ruling Poised to Drive Interest in Traditional Plans

May 7, 2021, 2:46 PM

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 ...

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