By Admin May 11, 2021 Category: Business Law Tags: benefits california employment law calsavers calsavers retirement savings chase law group chase law manhattan beach employer retirement program employment law small business retirement
Employers with five or more employees are required to participate in CalSavers if they do not already have a workplace retirement plan. CalSavers is a retirement savings program for private sector workers whose employers do not offer a retirement plan. The CalSavers program is being implemented by the state and enables small businesses and employees to make an automatic payroll contribution into a personal IRA retirement account. The program is designed to be self-sustaining, so there will be no taxpayer funding and no employer or state liability for the program and the retirement account is overseen by the CalSavers Retirement Savings Investment Board.
Here are the CalSavers deadlines to register based on the size of your business:
Over 100 employees September 30, 2020 (Deadline Passed)
Over 50 employees June 30, 2021
5 or more employees June 30, 2022
(The program does not apply to businesses with fewer than five employees or those businesses that already offer a qualified retirement plan.)
CalSavers impact on employers
Employers will not contribute to funds, manage funds or have any responsibility for financial advice. Therefore, the retirement program is attractive to small businesses that can’t afford the overhead and administrative costs of managing an employer-sponsored retirement program but would like to offer employee retirement options to help attract a talented workforce and boost employee morale. Employees’ contributions to the fund must be sent through the employers’ existing payroll system each month.
Requirements for small businesses
At this time there is not a lot for small businesses to do to prepare other than to ensure that they provide a qualified retirement option, or enable their employees to make an automatic contribution from their paycheck into their CalSavers account by the deadlines based on their business size. It is expected that administrative requirements for employers will be minimal, and employees will choose whether they want to participate or opt-out of the program.
To enroll your small business in CalSavers or to get more information visit CalSavers.com.
Need help navigating new small business requirements?
Contact the Chase Law Group Team for support with employment matters and business compliance to stay in good standing with the latest laws.