The California law requires private-sector companies with five or more employees that are lacking their own plans to deduct contributions from employee paychecks and put them into retirement accounts that are tax-deferred or tax-free. Employers would automatically enroll employees at 3% of pay, though workers would be free to opt out. The California Secure Choice program authorizes the state to invest that money in Treasurys and other similar investments until it chooses one or more professional money managers to offer investment options.

http://www.wsj.com/articles/california-governor-signs-bill-to-create-state-sponsored-retirement-plan-1475176681?mod=e2tw