State law now requires all businesses with five or more employees to participate in CalSavers if they do not offer a qualified retirement savings plan from the private market. Eligible employers must register for CalSavers by their state required deadline, which vary by employer size. The deadline for employers with 5 or more employees is June 30, 2022. The registration deadlines for employers with more than 50 employees have passed. Those who have not yet registered should do so as soon as possible to avoid penalties. Eligible employers don’t need to wait and can register any time before their deadline. For more information on how to get started, visit CalSavers.com.
The State of California created CalSavers to ensure all Californians can save for their future with the ease of automatic payroll contributions and portability that allows them to keep saving as they move from job to job. With many people struggling to overcome financial setbacks caused by the pandemic, many employers are looking at retirement programs to recruit and retain employees, and help employees improve their financial wellness and save for the future.
For employers, CalSavers will eliminate the three major concerns that some small business owners cite as reasons for not offering a retirement plan: fees, liability, and complex administration. Instead, CalSavers provides employers a program with:
• Zero fees for employers to facilitate.
• No employer fiduciary liability because CalSavers is not an employer-sponsored plan.
• Simplicity. All employers have to do is maintain an employee roster and deduct and remit contributions. There are no forms for employers to collect or distribute and employees manage their accounts directly with CalSavers.
For employees, CalSavers is a completely voluntary workplace Individual Retirement Account (IRA) program designed to be simple, low-fee, and portable from job to job. Employees will be automatically enrolled, but can choose to opt-out at any time. Eligible employers are encouraged to sign up at any time! Individuals who don’t work for a participating employer and self-employed entrepreneurs can sign up on their own here. For more information or to join a free webinar, please visit CalSavers.com. To stay connected, follow them on Twitter and Instagram @CalSavers, like them on Facebook, or connect with them on LinkedIn.