July 2, 2019

CalSavers Opens for Enrollment beginning July 1, 2019

CalSavers is a new California law designed to encourage employees to save for retirement. CalSavers was originally called California Secure Choice and was approved by the State Legislature in 2016. In California, beginning July 1, 2019, the CalSavers Retirement Savings Program will open to all eligible employers. CalSavers provides employees with a retirement savings program without burdening employers with administrative complexity, fees, or fiduciary liability of existing options. Most employers with at least five employees, that do not already offer an employer-sponsored retirement plan, will be required to begin offering a retirement plan or provide their employees access to CalSavers.

Employer Requirements

Every California employer must participate in CalSavers if it has:

  • No retirement plan

  • More than five (5) full or part-time employees (with at least one employee in California).

Employers that maintain employer-sponsored “retirement plans” such as 401(k) plans, qualified profit sharing plans, defined benefit plans, union multiemployer pension plans, among other qualified workplace retirement savings vehicles, are exempt.

Any employer with at least five employees that doesn’t already offer a workplace retirement savings vehicle will be required to either (i) begin offering one via the private market or (ii) provide their employees access to CalSavers. After CalSavers opens for enrollment, employers subject to the mandate can register for CalSavers at any time and will be required to comply pursuant to the following deadlines:

Size of Business

     Deadline for Compliance

100< employees

     June 30, 2020

50< employees

     June 30, 2021

5+ employees

     June 30, 2022

Employers with fewer than five employees (or already offers its employees a retirement plan) are not subject to the CalSavers mandate. Note that employers that already sponsor their own retirement plans may receive notices that they must register for CalSavers when in fact they are exempt and need not register or participate.

Employers may simply register online (https://www.calsavers.com/), upload their employee roster to enable enrollment of all employees; designate their payroll services provider to facilitate transactions (if applicable); and transmit the payroll contribution to the program’s third-party administrator. Employers will not contribute to or manage investment funds, or be required to offer financial advice to their employees. Participating employee contributions will be submitted via payroll deduction.