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California Auto-Retirement Program Passes Legal Test in 9th Cir.

May 6, 2021, 4:54 PM

State efforts to create automatic retirement programs for workers without access to employer-sponsored plans got a boost from the Ninth Circuit, which on Thursday rejected a lawsuit claiming that California’s auto-retirement program improperly interferes with the federal Employee Retirement Income Security Act.

The CalSavers Retirement Savings Program isn’t preempted by ERISA because it’s run by the state without forcing employers to create their own plans, the court held. The decision marks the first time a federal appeals court has addressed whether state-administered automatic retirement programs fall within ERISA’s ambit.

“CalSavers is not an ERISA plan because it is established and ...