Early Childhood Coalition Joins 40,000 Child Care Providers Calling On State Leaders To Save System In Crisis

5,000 child care providers have been forced out of business this year 

A coalition of 77 organizations, committed to improving child care access in California, sent a letter to Governor Newsom, President pro Tempore Atkins, and Speaker Rendon today, urging the state leaders to take immediate action to save California’s child care system, and thus support California’s frontline workers as well as a just and equitable economic recovery. “We know that without COVID-19 relief and permanent economic protections for child care providers, real economic recovery in California will be impossible,” they wrote. 

The letter calls for state leaders to ensure that every child has access to quality early learning and care, and that family child care providers, and all early educators, receive the pay, respect, and resources they need as essential workers to provide this invaluable service during this critical time.

Satomi Rash-Zeigler, President of the San Diego Coalition of Black Trade Unionists said: “If California fails to address its child care crisis, we not only risk compromising our response to COVID-19, but we also risk compromising an entire cohort of children who won’t receive the care and attention they need to thrive.”

The coalition of non-profit, labor, and social justice organizations stressed that California’s child care system has been in crisis since long before the state went into lockdown in March. Many family child care providers experience persistent financial hardship due to low pay and lack of access to affordable health coverage. Quality child care can also be hard to find or too expensive for working families, all while more than 1.8 million children who are eligible for state-subsidized care fail to receive it and fall through the cracks.

Since January of this year, over 5,200 child care providers in California have been forced to close their doors with no help or intervention from the state. One of the critical lessons learned from the 2008 financial crisis is that without immediate action, these providers will never again be able to open their doors to serve California children most in need.

“As one of the largest childcare agencies in California, we work on the ground with thousands of family child care providers every day. We have seen firsthand the financial struggles providers are facing, leading to closures that ultimately reduce the access low income families have to care in our state. Family Child Care providers have been the heroes during this pandemic with most staying open risking their lives to ensure that essential workers have the child care they need to keep the rest of us safe. Now the state has thrown up their hands placing an effective tax on the low-income women of color who serve as the backbone of California’s childcare system. It’s time our state leaders fulfill their promises to our children and early educators to support quality, affordable childcare for working families through the course of this pandemic and beyond.”
—- Dr. Michael Olenick, CEO, and President at The Child Care Resource Center (CCRC)

The letter specifically asks for:

  • Adequate reimbursement rates for children participating in distance learning
  • Financial support for providers who have to close their doors following potential COVID-19 exposure so they can reopen
  • Restoration of the unilateral cut to providers’ pay by continuing to cover families’ portion of fees for children who receive child care subsidies when families keep children home to prevent COVID-19 spread or exposure

With California’s schools closed due to COVID-19 restrictions, child care providers’ value in helping close achievement gaps is only becoming more evident. Child care providers are some of the only in-person educators right now. They are critical to making distance learning work and combating educational deficits, with no guarantee they’ll be reimbursed.

“Family child care providers find solutions to difficult problems, and we have long known that their endless support is cornerstone in our ability as working parents to be able to successfully balance our career and our family lives.”

Jean Cohen, South Bay Labor Council Interim Director

Child care providers have been rightfully deemed essential workers, but the state’s investment is needed to ensure that they can continue to support their communities who rely on access to care.

WHAT – What benefits does the Retirement Fund expect to offer providers?

Expand the Retirement Fund Benefits Table to see benefits.

 

 Plan Rules
Eligible participants*

You are eligible to participate in the Retirement Plan for a 2024 contribution if you are:

  • A licensed child care provider
  • Who has been paid 6 or more months of child subsidy in the 2023 calendar year (can be non-consecutive months).
Eligibility for benefit credit for contributions in 2024*

You will earn your full service credits for 2023 if you were paid for ten or more months of child subsidy in 2023.

If you were paid for 6 or more months of child subsidy, you will receive 60% of your service credits, 70% for 7 months, 80% for 8 months and 90% for 9 months. You will not earn any service credit if you were paid for less than 6 months.

ContributionsThe only contributions to the Retirement Plan will be paid by the State. The Plan does not accept contributions from you.
Amount of annual employer contributions for 2023 service allocable to participants in 2024*

The amount of the State contribution on your behalf in 2024 will be based on two factors:

(1)  the number of years and months that you held a license as of 12/31/23; AND

(2)  the number of months that you were paid for a subsidized child in 2023.

  • If you were paid for ten or more months, you will receive your full contribution.
  • If you were paid for 6 to 9 months, you will receive a pro-rated contribution.
  • If you were paid for less than 6 months, you will not receive a contribution in 2024.
Amount of annual employer contributions for 2024 service allocable to participants in 2025*You will earn one full service credit for the State contribution on your behalf in 2025 if you were paid for ten or more months of child subsidy in 2024. If you were paid for 6 to 9 months in 2024, you will receive a pro-rated service credit. You will not earn any service credit if you were paid for less than 6 months in 2024.
VestingYou are “vested” in any contribution correctly made to your account. You do not need to work a minimum number of years before 2024 to be entitled to a benefit.
Distribution events

You can elect to receive your account when:

  • You stop all work as a licensed provider for 9 consecutive months at any age (“terminate from service”);
  • You stop all work as a licensed provider for 3 consecutive months at age 60 or older (“retirement”); or
  • You attain age 73, which is the age you are required to start receiving payments, unless you are still working.
Forms of distributions

If you are age 60 or older and stop all work as a licensed provider for 3 consecutive months and elect to retire, you can choose to receive your account balance as:

  • One lump-sum payment
  • Approximately equal monthly payments for 5 years
  • Approximately equal monthly payments for 10 years

If you are younger than age 60 and stop all work as a licensed provider for 9 consecutive months, you can only elect to receive your account as one lump-sum payment.

Death benefitsSince your account is 100% vested, you can designate a beneficiary (or multiple beneficiaries) to receive your account balance if you die before you receive it.
InvestmentsThe Board of Trustees will manage how the Retirement Plan is invested on your behalf, with the assistance of investment professionals.

*Special rules apply to providers where more than one provider is on the payment record.

who

Who is eligible for the Retirement Fund benefits?

State contributions to the Retirement Plan are tied to the child care subsidy program. To be eligible for retirement benefits in 2024, you must be a licensed provider who has have been paid for work with a subsidized child in at least 6 months in 2023-these months do not need to be consecutive. License exempt providers are not eligible; however, if you become licensed in a year, your work in that year may count for eligibility.

when

When will the benefits be available?

State contributions to the Retirement Plan are tied to the child care subsidy program. To be eligible for retirement benefits in 2024, you must be a licensed provider who has have been paid for work with a subsidized child in at least 6 months in 2023-these months do not need to be consecutive. License exempt providers are not eligible; however, if you become licensed in a year, your work in that year may count for eligibility.

how

How can I get help enrolling?

The Plan will automatically enroll you based on the information it has but you should immediately complete the form that the Plan will send you to be sure that the Plan has all of your current information and that you receive credit for your years of licensed work.