CalSavers is here! And there’s an employer requirement.
Here’s what you need to know:
In July of 2019, a public board chaired by the State Treasurer rolled out the CalSavers Retirement Savings Program, the State’s ambitious new effort to level the playing field for small business workers, the self-employed, and the nearly 7.5 million Californians who lack access to a savings vehicle at work – up to 1.5 million of whom live in LA County alone.
It comes at zero cost to taxpayers or employers.
Featured in both the LA Times and on Univision 34 LA, CalSavers launched statewide July 1, 2019, and state law now requires all businesses with five or more employees to either offer a retirement savings vehicle from the private market or register for CalSavers. The deadlines for employers to register roll out over a three-year period based on the size of a business.
For employers, CalSavers will eliminate the three major concerns that small business owners cite as reasons for not offering a retirement plan: high 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.
- Simple administration. All employers have to do is maintain an employee roster, and deduct and remit contributions. CalSavers does all the communication with employees.
For employees, CalSavers is a 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.
Eligible employers don’t have to wait for their deadline and can sign up at any time! Individuals who don’t work for a participating employer and self-employed entrepreneurs can sign up on their own beginning fall 2019. For more information please visit CalSavers.com. To follow CalSavers progress sign up for email updates, or follow CalSavers on Twitter @CalSavers.
BizFed will be hosting a series of workshops to present more details about CalSavers program, what’s required for your organization, provide resources and answer any questions you may have. Dates and times forthcoming.
If you have any questions regarding this program, please reach out to Sarah Wiltfong at firstname.lastname@example.org, who is the policy manager on this issue.