The CalSavers Retirement Savings Program was set up by law to ensure that all California employees have a simple way to save for retirement. As of June 30, 2022, the law will apply to all employers with five or more employees over the age of 18, with no minimum hourly or tenure threshold.
- If you do not provide a retirement plan (see Qualified Alternate Retirement Plans below), you must register with CalSavers.
- If you do provide one or more qualified retirement plans (see below), you are not required to participate in CalSavers. However, you have the option to register with CalSavers so that your employees can choose whether to use CalSavers or the plan you offer. Employees can also choose not to contribute to any plan.
Registering for CalSavers is a simple process. Once your company is registered, you will submit a list of all employees, who will each be contacted by CalSavers with account information. Employees can then choose to opt in or out.
- Each CalSavers account is an after-tax Roth IRA set up for each employee, funded through automatic payroll contributions.
- Employees who participate can choose how much they want to deduct, and how their deductions will be invested.
- Employees can opt out and in at any time, and change their contributions.
- CalSavers accounts are portable, so employees can continue with the program when they change employers.
Qualified Alternate Retirement Plans
The CalSavers law requires all California companies to register, unless they already provide a retirement plan. Qualified retirement plans include:
- 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