CalSavers Retirement Savings Plan
CalSavers is the state-run retirement savings program meant to assist private sector employees plan and save for retirement. The program is required for employers who do not offer their own qualified retirement plans and who have five or more employees.
While the first deadline for employer registration was in 2020, this program’s application has been a long-time coming[i] since its introduction back in 2008 to its approval and implementation in 2016 and its official launch on July 1, 2019.
Government Code § 100032 sets up the deadlines for employer registration: 12 months from the time of launch for employers with 100 or more employees; 24 months from the time of launch for employers with 50 or more employees; and 36 months from time of launch for employers with 5 or more employees. The program officially opened for enrollment on July 1, 2019, so that is the time of launch used to calculate the deadlines above. The first deadline was set for June 30, 2020, but was extended to September 30, 2020 due to the COVID-19 pandemic. For employers with 100 or more employees who did not register by the September deadline, CalSavers urges them to contact the Client Services Team[ii] to discuss penalties and for assistance in registering.
The next deadlines for registration are June 30, 2021 for employers with 50 or more employees, and June 30, 2020 for employers with 5 or more employees. While these are the mandated deadlines, employer registration can take place at any time.
As An Employer, What Are My Responsibilities and Liabilities?
For employers, the registration process, providing employee information, and facilitating any deductions through payroll are all that is required. There are no fees to employers, nor any fiduciary responsibilities.[iii]
The CalSavers program contacts the employees and does all the work of getting them set up and giving them the opportunity to opt-out of the program. Once registered, the only ongoing obligation of the employer is to maintain/update the employee roster information and to deduct and transfer participating employees’ contributions. Check with your payroll company to see if they will facilitate remitting employee contributions to CalSavers.
In addition to an in-depth FAQs section[iv] on its website, CalSavers also offers webinars for employers to learn about the program and their responsibilities; as of this writing there are at least three webinars a week covering general information, how to add employees to the roster, and how to remit the contributions.[v]
Are Certain Employees Exempt from CalSavers?
All employees that work for an eligible employer are required to be added to the roster on the CalSavers website. This includes full-time, part-time and temporary employees. Even if the employees are no longer with your business by the time they are fully set up in the system, the CalSavers program goes where the employee goes. So, once set up, the employee can take their CalSavers account to the next employer and continue to use it to save for retirement. Because the CalSavers program is meant to benefit workers who may not have access to an employer-provided retirement plan, setting up employees, even temporary ones, is required of businesses so eventually all workers have a path to retirement savings.
To learn more, visit: https://www.calsavers.com/.
[i] CalSavers History, https://www.treasurer.ca.gov/calsavers/history.asp. [ii] CalSavers Contact Us, https://www.calsavers.com/home/contact-us.html. [iii] Cal. Gov. Code § 100034. [iv] CalSavers Frequently Asked Questions, https://www.calsavers.com/home/frequently-asked-questions.html. [v] CalSavers Webinars for Employers, https://employer.calsavers.com/home/employers/events.html.