Explaining Southern California's economy

California tackles the looming retirement crisis — but will it be enough?

CA Governor Jerry Brown Holds News Conference On Pension Reform

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California Gov. Jerry Brown discusses pension reform during a news conference in Los Angeles. The governor just signed a bill that would create a retirement plan for millions of workers in the state who don't currently have access to one.

There's no debate that Americans aren't saving enough for retirement. The average nest egg for 65-year-olds is just over $65,000. Saving enough for retirement has become more difficult as old-school pension plans have given way to 401(k)-type plans that shift the burden of risk to employees. But California has come up with a way to address this problem.

For 6.3 million Californians.

Gov. Brown just signed into law SB 1234, the "California Secure Choice Retirement Savings Trust." The bill was co-sponsored by state Sen. Kevin de Léon (D-Los Angeles) and Senate President Pro Tem Darrell Steinberg. It creates a private-sector retirement plan for the aforementioned 6.3 million private-sector workers who currently don't have access to a retirement plan through their jobs.

"I'm ecstatic," de Léon said. "Much of the middle class is shut out of retirement security, and the signing of this bill shows that retirement security isn't just for the elite."