If employers of a certain size do not currently offer their employees a way to save and invest for retirement, then California will soon require these employers to enroll in CalSavers, a state-sponsored retirement program. CalSavers is free for employers and CalSavers takes responsibility for choosing the mutual funds. The CalSavers’ website states in part that from beginning to end the employer’s sign up process generally takes 30 minutes. After an employer signs up, the employer remits employee payroll contributions to CalSavers each pay period. Employees are automatically enrolled in a post tax Roth individual retirement account; however, a pretax IRA will be available later in the year. 5% of the worker’s paycheck is automatically deducted, increasing by 1% each year and it caps at 8%. Employees are allowed to opt out or change the amount that he or she saves. Employers are not allowed to match contributions.
If employers of a certain size do not currently offer their employees a way to save and invest for retirement, then California mandates that certain employers enroll in CalSavers, a state-sponsored retirement program. Employers with 100 workers have until June 30, 2020 to comply. Employers with 50 or more employees have until June 30, 2021 to comply and employers with 5 or more employees must enroll by June 30, 2022.
If you have a question or want to discuss any employment issues, please feel free to give Elizabeth Fritzinger a call.