CSAC Bulletin Article

Retirement for All: CalSavers Provides Access to Workplace Retirement Savings Accounts

November 2, 2023

As per the requirements set forth in SB 1234 (De León, Chapter 734, Statutes of 2012), the California Secure Choice Retirement Savings Program was established to provide a statewide retirement savings program for private workers who do not have access to an employer-sponsored retirement plan. The program was officially renamed as the CalSavers Retirement Savings Program through AB 1817 (Assembly Committee on Budget, Chapter 37, Statutes of 2018). Current law requires private employers with at least one employee to offer a qualified retirement plan or participate in the CalSavers program. Local governments, tribal entities, and churches are exempt.

Last year, through the signing into law of SB 1126 (Cortese, Chapter 192, Statutes of 2022), CalSavers was expanded to eligible employers with as few as one eligible employee. With the new law, employers that do not sponsor a retirement plan and have between one and five employees are required to participate in the CalSavers program by December 31, 2025.

While roughly half of Californians benefit from the financial security of saving for retirement via an employer-sponsored retirement plan, these opportunities are not universal and often cost-prohibitive to offer by small businesses. The CalSavers program intends to bridge the retirement savings gap.

At no cost, eligible employers must register with CalSavers if they don’t sponsor a retirement plan. Employees can join through a voluntary automatic enrolment process. Employees that don’t opt out will begin to contribute a default 5% of their pay towards their personal retirement savings program – and can adjust the contributions or investment options at any time. Timelines for compliance vary by employer size. If an employer fails to comply with the law, the California Franchise Tax Board collects penalties, up to $750 per employee.

Complete information for employers and employees including eligibility, how to register, and other resources are available on the CalSavers website. CSAC encourages counties to share information about the CalSavers program with the businesses in your county.

Advertising the CalSavers program and timelines for compliance is a prime opportunity for public-private partnership to strengthen the fiscal security of our communities. Counties can support local businesses by encouraging engagement with CalSavers and referring employers to the CalSavers website, the employer support call center at (855) 650-6916, or by contacting fieldsupport@calsavers.com.

With increased access to retirement savings programs, millions of private sector workers will have improved financial security and can look forward to a stable future. CalSavers provides an opportunity for business owners who otherwise would not be able to offer a retirement plan to employees to provide competitive benefits to attract and retain employees. 

Counties can view employers most likely to be required to participate in the CalSavers Program by accessing the CalSavers Businesses by County interactive map maintained by the California Employment Development Department.

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