CalSavers - California’s Retirement Mandate for Employers
|CalSavers - California’s Retirement Mandate for Employers
Learn More About Deadlines, Compliance, and the CalSavers Program
State law now requires all employers with five or more employees to facilitate CalSavers if they do not already provide a retirement plan. Deadlines for employers to comply roll out over a three-year period based on the size of business. The registration deadline for employers with more than 100 employees passed on September 30, 2020 (extended from June 30, 2020). Eligible employers with more than 100 employees who have not yet registered, should do so as soon as possible to avoid penalties. The deadline for employers with more than 50 employees is June 30, 2021 and June 30, 2022 for employers with five or more employees. For more information on the deadlines click here.
California launched CalSavers to give employers an easy way to comply with the mandate and help their employees save for retirement. CalSavers is designed to be easy to administer and has no employer fees. Operating at no taxpayer expense, CalSavers is professionally managed by private sector financial firms with oversight from a transparent public board chaired by the State Treasurer.
Since CalSavers is not an employer-sponsored plan, employers have no fiduciary liability, there are no forms for employers to collect or distribute, and employees manage their accounts directly with CalSavers.
Per Government Code Section 100033(b), each eligible employer that, without good cause, fails to allow its eligible employees to participate in CalSavers, on or before 90 days after service of notice of its failure to comply, shall pay a penalty of $250 per eligible employee. If noncompliance extends 90 days or more after the notice, and if found to be in noncompliance 180 days or more after the notice, an additional penalty of $500 per eligible employee.
For employees, CalSavers is designed to make retirement saving easy. Employees are enrolled automatically into CalSavers unless they choose to opt out. Once enrolled, employees can contribute to their personal retirement account automatically with each paycheck. Savers can either stick with the standard account settings or choose their own. To ensure CalSavers works for our mobile workforce, savers keep their account as they move from job to job.