In Practice June 2, 2008

CA Assembly Approves Opening CalPERS to Private Sector

California’s Assembly voted 42 to 28 for the California Public Employees' Retirement System (CalPERS) to oversee a separate and voluntary investment program for private workers.
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Assembly Bill 2940 is aimed at the six million employees in California who aren’t offered a pension or retirement savings plan at work (see Bill Would Open CalPERS to Private Sector Workers).

The Sacramento Bee says the legislation would not allow private sector workers to become members of CalPERS, but would allow them to invest funds through payroll deduction into retirement accounts managed by the pension system. Workers would not have to withdraw assets when they switch jobs, and businesses could match employee contributions if they desire, according to the news report.

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The bill now goes to the Senate. Gov. Arnold Schwarzenegger supports the bill, but the program would only be launched if CalPERS determines it is feasible, federal agencies approve, and startup funds are appropriated in the state budget, the Bee says.

Earlier this month the pension system’s board decided to take a neutral stand on the proposed legislation for now. The full agenda of that meeting is here.

 

Products May 30, 2008

Nationwide Issues Bill of Rights, Fiduciary Warranty

Nationwide Retirement Plans launched the Nationwide Bill of Rights and a fiduciary warranty to educate employers about their responsibilities.
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The Nationwide Fiduciary Warranty outlines the plan sponsor’s fiduciary obligations and defines Nationwide’s role should their investment decisions come into question.

Nationwide said it offers the following services to help plan sponsors, including:

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  • fiduciary tools: access to a Model Investment Policy Statement with in-depth fund analysis, monitoring tools, and regular plan-level reporting;
  • fund selection: programs that offer a range of investment options;
  • choice for employees, without increasing fiduciary risk: a mutual fund window with no trading fees, self-directed brokerage and managed accounts from multiple money managers;
  • compliance resources: Nationwide’s fiduciary handbook, 404(c) checklist, due diligence file checklist and plan fiduciary meeting checklist.

For an additional fee, Nationwide will also become a full-service trustee, the company said.

“Investment professionals often only get a few hours a year to meet with a plan’s trustees. Nationwide wants to make sure that they are able to make best use of that time. The Nationwide Bill of Rights provides a solid foundation for a due diligence conversation,” said Joe Frustaglio, national sales manager for private-sector retirement plans, in the release.

More information is available at www.nationwide.com/rpsales or by calling 1.800.626.3112.

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