On September 29, 2016, Governor Jerry Brown signed into law Senate Bill 1234 approving the implementation of CalSavers (formerly known as California Secure Choice), an automatic enrollment payroll deduction IRA program ensuring that California employees have access to a workplace retirement savings program. The program requires that all employers with at least five California-based employees, offer a qualified retirement savings vehicle for their employees either through the private market or provide them access to CalSavers.
Employers who already sponsor the following plans types are not required to offer the new California state-run retirement program:
- Qualified pension or profit-sharing plans under 401(a)
- 401(k) plans
- 403(a) plans
- 403(b) plans
- Simplified Employee Pension (SEP) plans
- Savings Incentive Match Plan for Employees (SIMPLE) plans
- Payroll deduction IRAs with automatic enrollment
To avoid incurring penalties, employer registration with CalSavers must be completed by the following deadlines:
More than 100 employees: September 30, 2020 (extended from June 30, 2020)
More than 50 employees: June 30, 2021
5 or more employees: June 30, 2022
Registration can be completed on the CalSavers website, which also includes additional information and resources for employers and employees.
This article is intended for educational purposes only and is not a substitute for obtaining competent accounting, tax, legal, or financial advice from a certified public accountant, attorney, or other business advisors. You should not act upon any of the information in this article without first seeking qualified professional guidance from your business advisors on your specific circumstances. The information presented should not be construed as advice or guidance from BFBA.