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SCA-1 Retirement savings plans: funding prohibition: General Fund.(2017-2018)

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CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Constitutional Amendment No. 1


Introduced by Senator Moorlach

December 05, 2016


A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by adding Section 17.5 to Article XVI thereof, relating to retirement savings plans.


LEGISLATIVE COUNSEL'S DIGEST


SCA 1, as introduced, Moorlach. Retirement savings plans: funding prohibition: General Fund.
Existing law establishes the California Secure Choice Retirement Savings Program and requires the California Secure Choice Retirement Savings Investment Board to design and implement the program according to specified parameters and requirements, including, among others, that the program include one or more payroll deduction IRA arrangements. If certain prerequisites are met and the program is opened for enrollment, existing law eventually requires all eligible employers, as defined, that do not offer employer-sponsored retirement plans or automatic enrollment payroll deduction IRAs to have payroll deposit retirement savings arrangements so that eligible employees may participate in the program. Existing law specifies that funding for startup and first-year administrative costs for the program may be appropriated in the annual Budget Act from the General Fund and requires the board to repay the amount appropriated, plus interest, as specified.
This measure would prohibit the state from incurring any liability for payment of the retirement savings benefit earned by program participants in the California Secure Choice Retirement Savings Program. The measure would also prohibit the appropriation, transfer, or encumbrance of moneys in the General Fund for the purposes of the program, including any unfunded liability that the program may incur, unless the appropriation, transfer, or encumbrance is for funding the startup and first-year administrative costs for the program.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

Resolved by the Senate, the Assembly concurring, That the Legislature of the State of California at its 2017–18 Regular Session commencing on the fifth day of December 2016, two-thirds of the membership of each house concurring, hereby proposes to the people of the State of California, that the Constitution of the State be amended as follows:

 That Section 17.5 is added to Article XVI thereof, to read:

SEC. 17.5.
 (a) The State shall not have any liability for the retirement savings benefit earned by program participants pursuant to the California Secure Choice Retirement Program. The State, and any of the funds of the State, shall have no obligation for payment of the benefits arising from the California Secure Choice Retirement Program.
(b) Except as otherwise provided in subdivision (c), moneys in the General Fund shall not be appropriated, transferred, or encumbered for the purposes of the California Secure Choice Retirement Savings Program, including any unfunded liability that the program may incur.
(c) Subdivision (b) shall not apply to funding for startup and first-year administrative costs for the California Secure Choice Retirement Savings Program.