House Joint Resolution 66

KAMMERER

& COMPANY

Esquire Plaza - 1215 K S l ree~ 17lh FIOOI S ACftAME NTO . CA 9S8 14

February 13, 2017 Honorable Kevin McCarthy Majority Leader U.S. House of Representatives 2421 Rayburn House Office Building Washington, D.C. 20515 RE:

House Joint Resolution 66

Dear Majority Leader McCarthy: On behalf of Small Business California and its network of more than 5,000 employers who represent 3.2 million small businesses in this state, we are writing to Oppose House Joint Resolution 66 that would overturn the U.S. Department of Labor's Final Rule which enables states to establish retirement savings plans for private sector workers. This resolution will have a negative impact on California's ability to help the 7.5 million Californians who currently do not have access to a workplace-based retirement plan to save for their retirement. Our state has worked diligently for over 4 years to develop the California Secure Choice Retirement Program (Secure Choice) that will provide workers who do not have access to a workplace retirement plan with a voluntary, low-cost and portable retirement plan. Secure Choice enables participants to save their own money through regular payroll contributions to an IRA that is managed by a private sector financial services firm with oversight provided by a public board . Secure Choice is modeled after the state's successful 529 College Savings plan and is financed entirely by participant's fees. Secure Choice receives no taxpayer dollars. Conirary to misinformation being spread about Secure Choice, the authorizing statute (SB 1234 - de Leon), clearly states that the program fund is not guaranteed by the State of California and the state and participating employers will have no liability for the payment of retirement funds earned by the participants. Experts all agree, direct contributions from a paycheck into a retirement account is the simplest and most effective way for individuals to save. Unfortunately, many small employers lack the HR expertise, administrative staff, or have little time and resources necessary to set up their own retirement plan. That is why many California small business associations and chambers supported Secure Choice because it offers employees access to a retirement plan with minimal employer responsibilities and no fiduciary obligation. Polling by Small Business Majority and AARP of small business owners found 2/3 of small

Honorable Kevin McCarthy Majority Leader U.S. House of Representatives Oppose HJR 66 February 13, 2017 Page Two

business owners in California support a state retirement savings program that would help small businesses and their employees save for the future. Nearly 75% of respondents think offering such a program would give their business a competitive edge. Throughout the legislative process, legislators worked closely with the business and financial sectors to address their concerns and ensure that Secure Choice worked effectively for business. The statute has specific provisions that state that employers shall not have any liability for employee's decisions to participate; they will also not be considered a fiduciary, nor shall they bear any responsibility for administration , investment decisions of their employees, or the payment of benefits to those employees. The bill also required that the Secure Choice Board work closely with employers to ensure that the administrative structure facilitates employer needs including clearly defining employer's duties and liability exemptions.

Small Business California urges you to oppose HJR 66. In doing so, you will help to ensure California and other states can continue to develop ·innovative programs to meet the retirement needs of its citizens. This program is at no cost to the state, relies on the private sector to manage the plan, and enables workers to effectively save their own money for retirement which in turn will help reduce future pressure on state and local social services. Small Business California greatly appreciates your leadership in this policy. If you have any questions, please contact me directly at 415.680.2109. You may also contact SB Cal's legislative advocate in Sacramento, Lori Kammerer, Kammerer & Company, Inc. , at 916.441 .5674 or at [email protected].

~cerely'.

'sda~uge

President Small Business California