IMPORTANT DEADLINE: California Employers with 50+ Employees Must Enroll in CalSavers

June 30, 2021 is the deadline for every California business with 50+ employees to enroll in the state’s CalSavers Retirement Plan, unless it has already established a qualified retirement plan with a private financial planner/advisor. While there is no direct cost to the employer to enroll or participate in the CalSavers Plan, many businesses throughout the state have opted to privatize these employee retirement funds, and have created stand-alone plans meeting certain criteria. Among the eligible, qualified plans an employer may use, in lieu of the CalSavers program:

• 401(a) – Qualified Plan (including profit-sharing plans and defined benefit plans)

• 401(k) plans (including multiple employer plans [MEP] or pooled employer plans [PEP])

• 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

• Automatic payroll deductions into an Individual Retirement Account (IRA)

Larger employers, with 100+ employees, were required to enroll in CalSavers or provide an alternative by June 30, 2020, and ultra-small employers (5+ employees) have until June 30, 2022 to participate.

If your business does not already have a qualified plan in place for your employees to save for retirement, you should immediately contact your financial advisor or planner, or alternatively, visit the CalSavers website here to enroll your business in the state plan. Failure to comply with this requirement prior to the June 30, 2021 deadline will result in statutory penalties between $250.00 and $500.00 PER EMPLOYEE and may expose your business to civil liability on a claim brought by your employees.

For more information about the CalSavers Retirement Plan, including enrollment details and an easy “how to” analysis, please visit the state’s website here.

For any questions about compliance with the bevy of California’s employment laws, including the requirements associated with the CalSavers Retirement Plan, please feel free to contact the attorneys at Poole Shaffery & Koegle, LLP for assistance.