A federal appeals court on Thursday upheld a California program that provides retirement savings accounts to workers whose employers don’t offer them.
A three-judge panel of the U.S. 9th Circuit Court of Appeals decided unanimously that the program, CalSavers, did not interfere with federal law.
The state established CalSavers in 2017 to encourage savings for future retirees. Private workers whose employers do not provide pensions or 401(k) programs were automatically enrolled in CalSavers. Unless workers opt out, their employers are required to remit money from payroll deductions to CalSavers to be deposited in IRAs set up on the employees’ behalf.
The Howard Jarvis Taxpayers Assn. sued to invalidate the program, calling it a “massive government boondoggle” and arguing that it was superseded by a federal retirement law.
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