By Kate Kriner, PHRca

The final deadline is approaching for employers to register for the CalSavers Retirement Savings Program.  If you have not previously registered and have at least 5 employees you must either register for the CalSavers program or offer another retirement plan by June 30, 2022. 

As your efforts to retain good employees in the current labor market become more challenging, you might have considered offering a Retirement Savings Plan to your employees and for one reason or another decided against it.  Well, the State of California beat you to the punch and now requires such plans for employers.

In 2016, CA enacted the CalSavers Retirement Savings Program with the passing of SB 1234.  This bill gave the Board (California Secure Choice Retirement Savings Investment Board) three years to design and implement a program for those employers that do not currently offer a retirement plan and have 5 or more employees.  If you do not offer any sort of retirement plan (i.e., 401(k), SIMPLE IRA, etc.), now’s the time to read on….

On July 1, 2019, the State of California opened the CalSavers program for all participants with an enrollment deadline varying depending on your size.  Check out the details at https://www.calsavers.com/

When is the deadline for action?  

Well, it depends.  There is a rolling deadline depending on your number of employees.  Those employers with 100 or more employees needed to register in the program or offer another plan by September 30, 2020; employers with 50 or more employees by June 2021; and those with 5 or more employees by June 30, 2022.  If you do not choose to enroll in CalSavers, you will still need to have a retirement savings plan in place.

What is the employer’s responsibility?

  • Register the business and designate a payroll company.
  • Upload employee information into the CalSavers database.
  • Facilitate automatic payroll contributions; transmit payroll contributions and distribute the state developed materials.

What isn’t the employer’s responsibility?

  • Employers are not expected to explain or advocate for the program—merely provide the information. If your employees have questions you are encouraged to direct them to call CalSavers.   CalSavers will communicate with your employees about enrollment and changes to their account.
  • Employee participation—employees can opt out of the plan.
  • Contributions—as the program is an IRA, employer contributions are not allowed.

As we often see in CA, there will be fines and penalties assessed if an employer is not in compliance.