California employers with 5 or more employees that do not already sponsor a qualified retirement plan must enroll their employees in the CalSavers Retirement Savings Program. There is no cost to the employer. The applicable regulations are located at 10 C.C.R. §§ 10000 – 10007.
The following types of plans are considered qualified retirement 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
- 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
The deadline for enrollment depends on the size of the employer. Employers with more than 100 employees should have enrolled by September 30, 2020. Employers with between 50 and 99 employees must enroll by June 30, 2021. Employers with between 5 and 49 employees must enroll by June 30, 2022.
To enroll in CalSavers, employers must register for the program on the CalSavers website (see below), provide basic employee roster information, and facilitate appropriate payroll deductions, either directly or through a payroll service.
Employers that fail to comply with the CalSavers requirement will receive a notice of failure to comply and could be subject to a penalty of between $250 and $500 per eligible employee.