Sacramento - UPI
Business groups in Sacramento stand in the way of proposed state legislation to create a retirement plan for low-income workers, officials said.
SB 1234, introduced by Sen. Kevin De Leon, D-Calif., would require private employers to withhold around 3 percent of wages of participating employees. That money would be collected by the state and invested, to later provide a modest sum to workers without traditional pensions or 401(k) retirement plans.
The bill has passed the Senate and the Assembly, and will be voted on by the Assembly Appropriations Committee as early as Wednesday.
\"They worked their fingers to the bone and have never built up any assets,\" De Leon told the Los Angeles Times. \"Once they retire because they cannot physically work, they will be dependent on taxpayers.\"
However, many Sacramento business owners oppose the bill. A coalition of small businesses sent a letter to the Appropriations Committee saying the program could cost the state more than $775 million annually.
\"This could be one of the most far-reaching bills affecting small businesses this session,\" said Richard Wiebe, a life insurance industry spokesman. \"They would bear the brunt of the costs.\"
Some business owners are in favor of the bill, such as John Kasparian, co-owner of Round the Clock Cleaners, Inc.
\"It\'s a good idea. It\'s cost effective and important for the employees who don\'t have anything right now,\" Kasparian said. \"If the benefits outweigh the expenses, then it will be worth it.\"