CalSavers was implemented to ensure that each employee in the state has access to a workplace retirement savings account. California state law (Title 21 of the California Government Code) requires employers who do not offer a retirement plan to participate in and register with CalSavers as early as December 31, 2024, depending on the number of employees. The registration deadline for employers with 5 or more employees is December 31st, 2024. The registration deadline for employers with 1 to 4 employees is December 31, 2025.
The State of California recognizes that not all employers have the resources to create, manage, and fund their own retirement plans for their employees. CalSavers is a simple, portable, low-cost way for workers to invest in their futures. An employer must register and participate in CalSavers if they do not sponsor a retirement plan and have one or more Californian employees.
Employers should register for an account at https://employer.calsavers.com. After registering, employers will be required to maintain their account by adding and removing employees and by submitting payroll deductions each pay period. After employer registration, please note the below key points for employees:
- Employees will be auto-enrolled after 30 days if they do not opt out and will begin saving through payroll contributions facilitated by their employer.
- Employees can opt out and rejoin at any time.
- The default savers account is a Roth IRA (after tax) that is set up in the employee’s name. (Employees can recharacterize to a Traditional IRA.)
- The default savings rate is 5% of gross pay. Employees can change their rate at any time.
- The employee’s account is portable. It stays with them even if they leave your workplace.
- Employees are responsible for managing their own accounts and can manage their account online or by phone.
Please note that the deadline for enrollment is different based on the number of employees. For more information about mandated deadlines for the CalSavers program, please visit https://www.calsavers.com.
Please reach out to our Client Accounting Services group if you have any questions about these requirements.
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