California’s Auto-Retirement Program Defends Criticism From Feds

California’s new auto-retirement program can exist alongside federal benefits law, despite federal regulators’ arguments to the contrary, the program’s chairman told the Eastern District of California.

The California Secure Choice Retirement Savings Program—called CalSavers—doesn’t create a plan governed by the Employee Retirement Income Security Act or interfere with the federal statute in any way, the program and chairman John Chiang argued in an Oct. 15 court filing. The program merely requires covered employers to withhold and forward payroll deductions to CalSavers, which doesn’t involve the level of employer discretion required to create an ERISA plan, Chiang said.

Chiang is responding ...