Currently, California, Oregon and Illinois are enrolling workers in their plans. Other states, including New York, Vermont, Maryland, and Connecticut, are developing similar programs.
The Justice Department argues the federal government “has a heightened interest” in finding the California state law that established CalSavers in violation of federal law, because it “is among the first of a number of similar state” laws “to be challenged” in the courts.
CalSavers’ legal woes began in 2018, when the nonprofit Howard Jarvis Taxpayers Association filed suit in U.S. District Court for the Eastern District of California, seeking to invalidate the program. The association argues that states can’t impose a retirement plan requirement since such plans are already regulated under ERISA.
In March, U.S. District Judge Morrison England Jr. dismissed the Taxpayers Association first lawsuit in 2018, but allowed the group to amend its complaint.
The Justice Department declined to comment.