CalSavers and ERISA Redux: The District Court’s Second Opinion in Howard Jarvis Taxpayers Association v. The California Secure Choice Retirement Savings Program

Abstract

On March 10, 2020, the U.S. District Court for the Eastern District of California (Morrison C. England, Jr., J.) issued its second substantive opinion in Howard Jarvis Taxpayers Association v. The California Secure Choice Retirement Savings Program.Confirming its initial decision, the district court again held that the Employee Retirement Income Security Act of 1974 (ERISA) does not preempt the statute creating the California Secure Choice Retirement Savings Program (CalSavers).

This second opinion is important for two reasons. First, it confirms that ERISA does not preempt California’s retirement savings program for the private sector. Taken together, the district court’s opinions about CalSavers provide a roadmap of the ERISA status, not just of CalSavers, but also of other states’ similar retirement security programs. ERISA does not preempt these government-operated programs.

Second, the district court decisions exemplify ERISA’s relatively limited preemptive effect in the wake of the Supreme Court’s decision in Gobeille v. Liberty Mutual Insurance Co. This restricted interpretation of ERISA preemption contrasts with the broader understanding which the Supreme Court first embraced. The district court was right to reject the plea that it return to that original, more expansive approach to ERISA preemption.

Keywords: CalSavers, Howard Jarvis Taxpayers Association, California SecureChoice Retirement Savings Program, ERISA, preemption, Gobeille v.Liberty Mutual Insurance Co., IRA payroll deposit arrangement,New York State Conference of Blue Cross & Blue Shield Plans v.Travelers Insurance Co., employee benefit plan