CalSavers

By June 30, 2022, small businesses with five or more employees that don’t offer a qualified retirement plan must register with CalSavers — a retirement savings program for private-sector workers.

CalSavers had a three-year phased rollout beginning in 2020. Large employers with more than 100 employees were required to register by September 30, 2020, and after the Ninth Circuit Court of Appeals upheld the program, employers with more than 50 employees were required to register by June 30, 2021. Now, employers are required to register by June 30, 2022, if they:

• Have at least five California-based employees, at least one of whom is 18 years old or older; and
• Don’t offer a qualified retirement plan, such as a 401(a), 401(k), 403(a), 403(b), 408(k), 408(p) or a payroll deduction IRA with automatic enrollment.

Eligible employers must register for the CalSavers program, and then, within 30 days of registering, provide the CalSavers program administrator with a collection of personal information about each individual employee. This information includes:

• Name;
• Social Security number;
• Date of birth; and
• Contact information for each eligible employee.

After a 30-day opt out period for employees ends, employers will begin deducting each employee’s contributions to the CalSavers program from their salary each payroll period; then, within seven days of deduction, it will remit the employee’s contributions to the program administrator through bank transfer.

Non-compliant employers will be penalized $250 per employee upon the first penalty notice. If noncompliance persists another 90 days, employers will be penalized an additional $500 per employee, for a total of $750 per employee for sustained noncompliance.

Note for Exempt Employers: Although not required, CalSavers requests that employers that already offer a qualified retirement program, and are exempt from participating in the program, inform CalSavers of their exemption in the employer portal.

Visit the CalSavers website to register and get more resources (like program brochures and templates for communications with employees), guided support and FAQs. 

Katie Culliton, Editor, CalChamber