CalSavers Deadline is Approaching for California Employers

What employers need to know:

• To determine applicability for the 5-employee threshold, the employer will look at the business’s average number of employees for the prior calendar year (i.e. 2021 for the June 2022 registration deadline). The threshold includes all California employees, including part-time and seasonal
• Employers submit participating employees’ contributions via payroll deduction, and cannot make employer contributions to employee accounts
• Registered employers will provide CalSavers with a roster of employees, and CalSavers will communicate program information directly to employees. No enrollment/program questions should be answered by the employer
• CalSavers will notify the employer via letter with an access code to register, which can be requested on the program website if misplaced or not received
• Enrollment in the program is automatic for employees that do not expressly opt out
• CalSavers will contact the employees directly to determine what their contribution rate will be, or whether they are choosing to opt out of the program
• Each employee’s contribution rate will be posted on the employer’s CalSavers web portal
• Within 30 days of entering the employee roster, the employer must begin collecting and remitting contributions each payroll period
• All employers meeting the employee threshold must register, even if all employees choose to opt out of the program

What employees need to know:

• Employees must determine their eligibility to participate in the program by considering contributions made to IRAs or other retirement plans that may exceed the annual limits
• If an employee does not opt-out, the employee is auto-enrolled in the program with an initial contribution rate equal to 5% of gross pay for the first year, increasing by 1% each year to a maximum rate of 8%
• Program contributions will be made through payroll deductions initiated by the employer
• Employees have options to customize their plan, choose investments or a different contribution rate
• Employees can opt out of the program at any time

More information can be obtained here: https://employer.calsavers.com/home.html