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Center for Labor Research and Education

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Meeting California’s Retirement Security Challenge through a State Sponsored Retirement Plan: Policy Design Challenges and Options

This paper outlines key choices in developing a state sponsored retirement system for private sector workers in California who lack access to a workplace pension. The first section briefly outlines the rationale for the creation of a publicly sponsored retirement plan. The remainder of the paper explores critical plan design choices that policymakers face within the constraints and opportunities afforded by two fundamentally different types of plan architecture: individual accounts such as 401(k)s and IRAs, and cash balance plans, a type of defined-benefit pension that limits employer risk and shares some of the characteristics of defined-contribution plans.