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A new state-sponsored savings plan let Lorenzo Harris offer his workers something he’s long wanted to give them: A way to sock away money for retirement.

“This program will help us compete in the marketplace,” said Harris, who has led Janico Building Services of North Highlands for the past 33 years.

His company is the first in the state to enroll in CalSavers, a program that will become mandatory over the next few years for private-sector businesses that are not already offering their own retirement savings plans.

Harris embraced CalSavers by signing up for its testing phase. Over the next six months, his is one of the companies that will help the state work out flaws as it prepares for a wider launch on July 1, 2019. CalSavers is recruiting more companies for the pilot phase.

When it’s fully running, CalSavers will automatically deduct 5 percent of wages from worker paychecks to build long-term savings accounts for them. Workers’ keep the savings when they change jobs. State officials say a 25-year-old private sector employee could accumulate $350,000 over time by feeding a CalSavers account.

People can opt out of CalSavers, but employers will have to make the program available to them.

Gov. Jerry Brown signed the law creating the program in 2016. It will be mandatory for companies with more than 100 employees in June 2020, with smaller companies joining it in 2021 and 2022.

CalSavers faces one hurdle in federal court, where the Howard Jarvis Taxpayers Association is suing the state to kill the retirement savings program.

The advocacy group contends that CalSavers plan violates a federal consumer protection law that sets standards for retirement plans offered by employers. It also argues that private sector employees are free to open their own retirement accounts without the state’s help.

CalSavers’ advocates counter that 7.5 million Californians work for companies that don’t offer retirement plans, and income from Social Security will not be enough to sustain them.

“We as one state are declaring that we are leaving no worker behind,” said Treasurer John Chiang, who has been touting the program at a series of events this week.

Harris referred to CalSavers as a “mandate” and said he usually opposes new government regulations on his business. But, he said, CalSavers is the rare government program “that benefits employees and employers.”

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