It won't work very well for plan participants, employers, the financial industry, advisors, or taxpayers. However, it's a potential goldmine for the U.S. Government.

The template will require employers that don't already offer a plan, with five or more workers, to automatically enroll all eligible employees in a Roth account with a deferral rate of 2-5 percent and no required employer contributions.

Although the comprehensive feasibility study behind Secure Choice identified several default investment options, the Board recommended just one for the first three years: U.S. Treasuries.

Read: SIFMA backs myRA while cautioning against state-run retirement programs

The fees participants will pay are likely to be 1 percent per year initially, not much below the 10-year Treasury yield. Before the Secure Choice Board made its recommendation, the Investment Company Institute asked it to delay and rethink assumptions about the plan's cost to participants and California taxpayers.

In summary: There is no investment choice or professional service/advice attached to these accounts. Yet, they will cost participants more than many advisor-supported mutual fund turnkey plans. It's unclear whether Secure Choice will give participants any access to their own money prior to retirement age, as they would have in a Roth IRA. Participants will not have access to loans, as they would in a Roth 401(k).

The Board did not say why it decided to recommend so little investment choice. Yet, by proposing an ERISA safe harbor for state-run auto-enrollment plans, the U.S. Government has made clear that it endorses them. The Government sees these plans as a huge potential market for U.S. Treasuries, capable of taking up the slack as foreign Treasury buyers (Japan, China) disappear. 

Behind the curtain, the idea of mandatory pension-like plans for millennials, funded by U.S. Treasuries and perhaps ultimately replacing part of Social Security, keeps creeping forward. As the largest state, with 6.8 million potential Secure Choice participants in the first year, California would be the biggest step to date.

You can help employers in your market by encouraging them to adopt a SEP, SIMPLE, or payroll-deduction IRA plan (with professional-service attached) before their state government imposes a costly, inferior, no-service plan on them. 

Here are links for more information:

Read the feasibility study behind California Secure Choice.

Read The Los Angeles Times' report on the Board's recommendation.

Read the ICI's request for a delay to the Secure Choice Board.