CalSavers Registration Deadline Coming Soon for Employers with 50 or More Employees
CalSavers is a state-run Roth IRA program for California-based, private-sector workers whose employers do not provide a retirement savings plan. Employers of five or more California-based employees that do not offer employees their own qualified retirement plan, must register with CalSavers and facilitate their employees’ access to the state-run retirement savings program. The program began in July 2019, but the deadline for employers to register with CalSavers varies according to the size of the employer:
- more than 100 employees: September 30, 2020 (extended from June 30, 2020)
- 50-99 employees June 30, 2021
- 5-49 employees: June 30, 2022
CalSavers does not apply to employers who already offer an employer-sponsored qualified retirement plan. Qualified retirement plans include:
- 403(a) – Qualified Annuity Plan or 403(b) Tax-Sheltered Annuity Plan
- 408(k) – Simplified Employee Pension (SEP) plans
- 408(p) – Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA Plan
- 401(a) – Qualified Plan (including profit-sharing plans and defined benefit plans)
- 401(k) plans (including multiple employer plans or pooled employer plans)
- payroll deduction IRAs with automatic enrollment
Employers do not contribute financially to the CalSavers plan, but must facilitate their employees’ access to the Program. Employers must:
- register for the CalSavers Program at www.calsavers.com;
- provide basic employee roster information to the Program for eligible employees (name, date of birth, Social Security Number or ITIN, and contact information); and
- facilitate employee contributions by payroll deduction each pay cycle and send contributions to CalSavers.
Employers who fail to comply will receive a notice of noncompliance. If noncompliance extends 90 days or more after the notice, employers are subject to a penalty of $250 per eligible employee. An additional penalty of $500 per eligible employee may be imposed if the employer is found to be in noncompliance 180 days or more after the notice.
More information about CalSavers, including frequently asked questions about the Program, can be found at www.calsavers.com.
Please reach out to an SMT employment attorney if you have questions about CalSavers or we can assist you with any employment issue.
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Spaulding McCullough & Tansil LLP
Employment Law Group