The initial three-year phased rollout of the CalSavers program has ended. If an employer’s mandated deadline was September 30, 3020, June 30, 2021, or June 30, 2022, and they have not registered with CalSavers, then they are out of compliance and must register immediately or face enforcement action which will include financial penalties.

Employers with 5 or more employees:

Each spring, we assess employer mandate status using employee data that employers submit to the Employment Development Department (EDD). Employers who reported an average of five or more employees on the four DE9C filings for the prior year are mandated and have a registration deadline of December 31.

Employers with 1-4 employees:

California recently passed legislation to expand the CalSavers mandate to employers with at least one employee. Starting on January 1, 2023, employers with 1-4 employees can register with CalSavers. This segment of mandated employers has until December 31, 2025, to register their business.

Businesses that do not employ any individuals other than the owners are exempt from the expansion of the mandate. Additionally, the usual categories of exempt employers will remain exempt. That includes government entities, religious and tribal organizations, and employers that sponsor a retirement plan.

State law requires employers that don’t offer their own retirement plan to facilitate CalSavers. If you employed an average of one or more California-based employees in the previous calendar year (at least one of whom is age eighteen) and don’t sponsor a qualified retirement plan, your business is required to register for CalSavers.

• 401(a) – Qualified Plan (including profit-sharing plans and defined benefit plans)
• 401(k) plans (including multiple employer plans or pooled employer plans)
• 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
• Payroll deduction IRAs with automatic enrollment

 

If you already offer a qualified retirement plan above, please inform us of your exemption on the employer portal.

Yes. Per Government Code Section 100033(b), each eligible employer that, without good cause, fails to allow its eligible employees to participate in CalSavers, on or before 90 days after service of notice of its failure to comply, shall pay a penalty of $250 per eligible employee if noncompliance extends 90 days or more after the notice, and if found to be in noncompliance 180 days or more after the notice, an additional penalty of $500 per eligible employee.

According to state law, employers shall not have any liability for an employee’s decision to participate in CalSavers, for their investment decisions, or for the performance of those investments.

Under California state statute (Section 100034) employers are not a fiduciary and have no responsibility or liability to Program participants for the choice of investment options or providers for the program. Employers have no civil liability, and no cause of action shall arise against an employer, for acting pursuant to the regulation prescribed by the Board defining the roles and responsibilities of employers that participate in CalSavers.

Employers are responsible for meeting their facilitation requirements as described in California law. Employers have no responsibility for establishing, maintaining or operating CalSavers. Specifically, Employers may not:

• Determine the terms of the IRAs offer through CalSavers;
• Select which investment options will be made available;
• Make employer contributions to CalSavers (including matching contributions);
• Advise employees regarding whether or not to enroll in CalSavers; or
• Take any other action related to the administration or operation of CalSavers beyond registering eligible employees and remitting payroll deductions.

No. Religious organizations, tribal organizations and government entities are exempt from the state law establishing CalSavers.

The requirements are the same for non-profit and for-profit employers. Volunteers who are not considered employees under state law are not eligible and will not be included in counting a non-profit employer’s number of employees.

Yes, if they are 18 or older.

Please note that employee contributions to the Program would not begin until the first payroll following the 30 day notification period, so depending on the length of employment, short term employees may not be able to make contributions.If we already have a retirement plan, can we also facilitate CalSavers? If you already offer a qualified retirement plan – good for you! Your business may not facilitate CalSavers with automatic enrollment. Non-mandated employers can choose to facilitate contributions from their employees who already have an account or have enrolled on their own.

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

If you already offer a qualified retirement plan, we request that you inform us of your exemption on the employer portal.

If you have any employees or independent contractors that have set up a CalSavers account on their own and request payroll deductions to be remitted to their CalSavers account, your business may choose to facilitate those contributions just like any other deduction such as a parking payment or charitable contribution.

If an employer is part of a controlled group of businesses that maintains a qualified retirement plan, that employer and any other members of the controlled group are exempt.

If an employer is part of a controlled group of businesses, none of which maintain a qualified retirement plan, it and the other members of the controlled group would be required to comply individually with the mandate by their respective deadlines.

The eligible employer is the entity that is the statutory or common law employer for California employees. Regulations clarify which entity shall be the eligible employer for a few multi-party employment relationships:

For employers that use the services of a temporary services or leasing employer, the eligible employer is the temporary services or leasing employer – not the clients who use the services of a temporary services or leasing employer. The client employer, however, is required to comply if they employ at least five of their own employees and do not sponsor a qualified retirement plan.

For employers that enter into a contract with a PEO, the eligible employer is the client employer using the PEO’s services – not the PEO. A PEO, however, is required to comply if they employ at least five of their own employees and do not sponsor a qualified retirement plan.

For a motion picture production company that uses the services of a motion picture payroll services company, the eligible employer is the motion picture production company – not the motion picture payroll services company. A motion picture payroll services company, however, is required to comply if they employ at least five of their own employees and do not sponsor a qualified retirement plan.

Administration of program participant accounts is handled through a contract with Ascensus College Savings Recordkeeping Services, LLC. Investments are managed by BNY Mellon Investment Adviser, Inc. [(CalSavers Sustainable Balanced Fund (Environmental, Social, Governance)] and State Street Global Advisors (all other funds).

The CalSavers Program is overseen by the CalSavers Retirement Savings Board, consisting of nine members, with the State Treasurer serving as chair.

In addition to Board oversight, the CalSavers program has a small staff of employees, and contracts with professional consultants to advise the Program