What you need to know
Starting in 2020, California state law requires employers who don’t already offer an employer-sponsored retirement plan, and who have five or more employees, either offer one via the private market or register with CalSavers.
If employers do not comply with their applicable registration deadlines, they will be penalized for non-compliance.
The three-year phased rollout includes staggered registration deadlines dependent on company size, however, all eligible employers are encouraged to register prior to their deadline.
Consider other options
While the CalSavers program may seem like a good option, it is extremely limiting to both the employee and the employer.
Not only does it not allow employees to contribute as much as they could with a 401(k), but it charges a high asset-based fee that literally eats away at retirement savings.
Since CalSavers is an individual Roth IRA, contributions are made with after-tax dollars and are not tax-deductible. High-income earners are discriminated against and cannot participate in the program.
A better option: SaveDay’s CalSavers compliant 401(k) plans
SaveDay doesn’t cost a thing to the employer, is extremely affordable for employees, and we take care of the work that CalSavers leaves to the employer.
Our 401(k) plans offer more flexibility for auto-enrollment, employer contributions, and allow for tax-deductible contributions. Oh, and we take care of all recordkeeping, administration, and compliance duties.
Bottom line – we do all the work for you, have more retirement plan flexibility, and are more affordable than CalSavers.