By Eric D. Morton
Businesses which employ 5 or more employees, and do not have a private retirement plan, must enroll with a California state retirement savings program called CalSavers by June 30, 2022. CalSavers is a IRA savings program that was started by the State of California two years ago. Under California law, employers must offer a private retirement plan such as a 401k or provide their employees access to CalSavers.
CalSavers was a program instituted by the State of California two years ago to encourage employee retirement savings. California is one of about 46 states with such programs. CalSavers is completely voluntary, low cost, portable retirement savings vehicle with professionally managed investments and oversight from a public, transparent board of directors, chaired by the California State Treasurer.
No cost and low overhead to employers
Employers with five or more employees register with CalSavers if they do not offer their employees a private retirement plan. Employers register with CalSavers and provide their employees’ information. Employees have 30 days to opt-out. Employees can also control their level of contribution to the plan if they remain in the plan. Employers make payroll deductions for participating employees. There is no cost to employers and no fees to employees.
Employers have no responsibility for the program beyond making it available to employees and facilitating deductions.
More information can be found at the CalSavers’ website.