Dear Clients:
All California employers are now required to register with the State of California retirement plan. The CalSavers Retirement Savings Program was created by state law to ensure all California workers can save for retirement through automatic payroll contributions facilitated from their workplace. The details and links below will help you navigate the registration process.
All California employers with more than 5 employees who do not offer a retirement plan must register with Cal Savers by June 30, 2022.
Registering takes just few minutes. You will need your company’s Federal Employer Identification Number or Tax Identification Number (EIN/TIN) and your CalSavers Access Code. (This was listed on your Registration Notice that all employers in CA should have received recently)
When you register, you’ll submit information for each eligible employee. This will begin the automatic enrollment process. Employees will then have 30 days to decide to participate or opt out. If they do not make a selection, they will be auto-enrolled in the program.
After you add employee information and the 30 day opt out period ends, you’ll begin facilitating payroll deductions each payroll period through bank transfer. These deductions will be added to the employee’s account and invested according to their selections.
Employers are not responsible for answering questions about the program, managing investment options, processing distributions, or giving investment/tax advice. Your employees will maintain their account directly through the CalSavers program.
You will need to register here: https://employer.calsavers.com/home/employers/program-details.html
After your employee information is added, your employees will be sent an invitation to set up their account. Each employee will then have 30 days to customize their account or opt out. If they do not take action after 30 days, they will be automatically enrolled in CalSavers with the standard contribution rate and investment funds.
There are no required actions for you during this period. However, we recommend employers take a few proactive steps – creating a deduction line item in your payroll software, review how to submit employee contributions or contact a payroll provider, if you rely on one - to be ready for when it’s time to submit contributions.
Communicate with employees You can use the word document to copy on your letterhead to send to employees just edit your company name.
If you have further questions you can use this link and contacts below to assist you.
Top Questions
As an employer, do I have to facilitate CalSavers? Who is an eligible employer?
State law requires employers to either offer their own retirement plan or register to facilitate CalSavers. If you have at least five California-based employees, at least one of whom is age eighteen, and don’t sponsor a qualified retirement plan, your business is required to register for CalSavers.
Qualified retirement plans include:
401(a) – Qualified Plan (including profit-sharing plans and defined benefit plans)
401(k) plans (including multiple employer plans or pooled employer 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
Payroll deduction IRAs with automatic enrollment
If you already offer a qualified retirement plan above, please inform us of your exemption on the employer portal.
Can employers start facilitating CalSavers at any time? When are employers required to take action?
Eligible employers can request to register at any time. The three-year phased rollout started in 2020 and includes staggered 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:
For eligible employers with more than 100 employees, September 30, 2020.
For eligible employers with more than 50 employees, June 30, 2021.
For eligible employers with five or more employees, June 30, 2022.
Newly eligible businesses starting in 2022: In Spring 2022, we (re)assessed employer eligibility based on employee data submitted to the Employment Development Department (EDD) as of December 2021. For these newly eligible businesses, their registration deadline is December 31, 2022.
Your eligibility and compliance deadlines are based on your average employees throughout the previous calendar year. This number is calculated by averaging the numbers of employees you report to the Employment Development Department on your previous four DE9C filings for the prior year.
Are there penalties for non-compliance?
Yes. Per Government Code Section 100033(b), each eligible employer that, without good cause, fails to allow its eligible employees to participate in CalSavers, on or before 90 days after service of notice of its failure to comply, shall pay a penalty of $250 per eligible employee if noncompliance extends 90 days or more after the notice, and if found to be in noncompliance 180 days or more after the notice, an additional penalty of $500 per eligible employee.
Are all employees eligible for the program? When do employees become eligible?
What does it mean that employees are automatically enrolled?
State law establishes CalSavers with what is commonly known as “automatic enrollment”. With automatic enrollment, eligible employees who do not choose to opt out will be enrolled automatically in the program. The feature has become common to retirement plans, with over half using automatic enrollment. Employees are enrolled with limited employer involvement. When an employer registers for CalSavers, the employer provides basic employee roster information to CalSavers. From beginning to end, this process generally takes about 30 minutes; many employers complete it in under 15 minutes. Employers are encouraged to complete this step when they register, but if they need more time, can do it within 30 days of their registration date. CalSavers uses this information to contact employees directly to make them aware of the Program and provide them information on how the program works, how to set up their account, and how to opt out if they wish. If an eligible employee takes no action within 30 days, they will be automatically enrolled in the program under the default saving settings. If they wish to make changes to their account setting or opt out of participating in the program, they will be directed to contact CalSavers. CalSavers has informational flyers, program materials, and sample emails employers may send to their staff to inform them about the program. Use of these materials is optional for employers, however state law requires employers to remain neutral about the program when describing it to their employees. After registration and enrollment, employers are responsible to deduct and remit each saver’s contributions each pay period. Employers are also responsible to add new eligible employees to the program within 30 days of their date of hire or date of eligibility.
What if my Employee does not want me to disclose information?
Employers facilitating the CalSavers program are required by law to provide information on all eligible employees to the program. The program administrator and record keeper are the only entity with access to employee personal data. They have a very strict privacy policy and use the highest level of security to protect personal data. What if my employee say they do not want to participate? Employees who do not want to participate can opt-out at anytime. There are three convenient ways to opt out. The easiest way to opt out is either by calling our automated phone system at (855) 650 – 6918 or through the website. You can also choose to download, complete, and mail-in a paper opt-out form. Employers can provide the phone number and opt-out form to their employees if they wish, although employees must contact the program directly and not through their employer.
Can an employer make contributions on behalf of their employees?
No. Employers are not allowed to make contributions on behalf of, or as a match to, employee contributions in this program. If an employer wishes to make contributions to a retirement plan on behalf of their employees, they should explore offering an employer-sponsored retirement plan.
How often do I need to send the contributions in?
Contributions must be submitted to the program for each paycheck and remitted within seven days of taking the deduction out of the participating employee’s paycheck.
How do I communicate to our employees about CalSavers?
Employers must remain neutral about their employees’ participation in CalSavers. You will be provided an email template at the time of your registration that you may share with your employees to inform them that CalSavers will reach out to them. Your employees will be contacted directly by the Program with all necessary information. If they have any questions, or wish to make any changes to their account, they should contact the Program directly (Client Services) at www.calsavers.com, at 855-650-6918 or clientservices@calsavers.com.
Can my payroll service provider facilitate CalSavers for me?
You may add your payroll service provider as a delegate to help perform the employer facilitation duties on employers’ behalf.
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