The registration deadline for CalSavers was extended to 9/30/2020

Beginning July 1, 2019, eligible employers may start participating in California’s state-sponsored retirement program – the CalSavers Retirement Savings Program (CalSavers). CalSavers offers a Roth Individual Retirement Arrangement (IRA) to eligible employees in California who do not have access to a tax-qualified retirement plan through work.

CalSavers is:

• Funded by employee after-tax contributions (through payroll withholding);
• Voluntary for employees (they can opt in or out of participation); and
• Administered by a private-sector financial services firm and overseen by a public board chaired by the State Treasurer.

While covered employers do not need to pay costs or fees in connection with CalSavers, they must facilitate enrollment in the program, set up payroll deductions and remit employee contributions.

The deadline for covered employers to register with CalSavers is staggered based on employer size. Due to the COVID-19 pandemic, the registration deadline for employers with more than 100 employees was extended from June 30, 2020 to Sept. 30, 2020.

EMPLOYER REGISTRATION DEADLINE

Covered employers can register with CalSavers at any time. There are deadlines for eligible employers to either begin to offer their own retirement plan or register for CalSavers. The deadlines vary depending on the size of the business, as follows:

COVERED EMPLOYERS

California employers must participate in CalSavers if they have five or more eligible employees and do not offer an employer-sponsored retirement plan. The requirements are the same for non-profit and for-profit employers.

An employer-sponsored retirement plan includes a tax-qualified retirement plan under the federal tax code, such as a 401(k) plan, 403(b) plan, a SEP plan, a SIMPLE IRA plan, a pension plan or a payroll deduction IRA with automatic enrollment.

PENALTIES

Covered employers that do not allow their eligible employees to participate in CalSavers may be subject to penalties under California law, including a penalty of $250 for each eligible employee who is not enrolled within 90 days of receiving notice of its failure to comply. An additional penalty of $500 per eligible employee applies if the employer does not comply within 180 days after the notice.

If you want more details regarding CalSavers or retirement plans, please feel free to contact TransGlobal Benefits.

888-831-8868