By Kathleen Pender, San Francisco Chronicle
Published: February 16, 2017
Updated:   February 16, 2017 – 6:34pm

California legislators are fighting a resolution in Congress that could derail plans to create a state-run retirement plan for private-sector employees who don’t have one at work.

The Republican-led House passed the resolution Wednesday. Its next stop would be the Senate floor. If it passes, President Trump is expected to sign it. If that happens, the state might have to go to court to salvage its plan or go back to the drawing board.

Conservatives worry that the state plans would cost too much and limit workers’ options for saving — charges that the supporters of the concept sharply dispute.

The resolution would overturn a ruling the U.S. Department of Labor made in late August. The rule said that state-run retirement plans for private-sector workers would be exempt from the Employee Retirement Income Security Act if they meet certain requirements.

This federal law, known as ERISA, protects participants in private-sector retirement plans, but it puts so many obligations on employers that many small ones do not offer one. Nationally, about half of private-sector workers don’t have access to a workplace plan, according to AARP.

Shortly after the rule came out, California adopted a law that requires any company with five or more workers in the state to either offer its own retirement plan or automatically enroll employees in a state-run plan called Secure Choice.

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