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What The New California State Mandated Retirement Benefit Means For Private Employers in California

  • 2019-07-23
  • Author: Haley Knapp

As of July 1st 2019, California launched the CalSavers Retirement Savings Program, after it was passed into law in 2016. RetirementDNA, Biocom's leading supplier for retirement plans and employee financial wellness programs., is offering employers a more comprehensive understanding of the program. CalSavers is mandated for all private employers in California who have more than five full or part-time employees over 18 years of age , unless you already sponsor a retirement plan for your company (verifying compliance is part of the mandate).

The effective dates for CalSaver implementation are based on employee headcount, with bigger employers going first:

June 30, 2020 – Companies with more than 100 employees
June 30, 2021 – Companies with more than 50 employees
June 30, 2022 – Companies with more than 5 employees


While employees who participate in CalSavers aren’t required to make any enrollment or investment decision, employers who are subject to CalSavers are required to do the following:
  • Register their businesses to participate by the required effective date, or verify that your company currently offers a retirement plan that satisfies the new mandate.
  • Track eligible employees and send required employee date to the CalSavers program administrator
  • Distribute to eligible employees, on an annual basis, an employee information package, including an opt-out form, opt-out instructions, and other information required by the CalSavers regulations
  • Auto-enroll new employees and those who are eligible during the plan’s annual open enrollment period
  • Adjust contributions on January 1 of each year for all active participant who’ve retained the auto increase feature
  • Set up arrangements with payroll providers to withhold contributions and submit them to the CalSavers program administrator.
The penalties for non-compliance start at $250 per eligible employee within 90 days of notice. They increase to $500 per eligible employee after 180 days or more after receiving notice.

To learn more about CalSavers, how it compares to a 401(k) plan (or other approved plan designs), and which approach might be best for your company and your employees, you can contact RetirementDNA.