The CalSavers program requires for-profit and non-profit employers with five or more employees, at least one of whom is age 18, to offer their employees either an employer-sponsored plan that offers favorable federal income tax treatment under the Internal Revenue Code or the CalSavers state-sponsored retirement plan. According to the CalSavers website, the CalSavers program “ensures nearly all Californians have access to a workplace retirement savings vehicle by offering employees a completely voluntary, low cost, portable retirement savings vehicle… .”
For answers to questions about the program, I accessed the FAQ page on CalSavers’ website, as well as emailing questions to my Seltzer Caplan McMahon Vitek partner Brian Katusian, a state bar-certified tax law specialist whose practice focuses on employee benefits.
What must an employer do to comply with the CalSavers program?
Employers with 5-50 employees that do not already offer a qualified retirement plan — such as a 401(k) plan — must register to facilitate the CalSavers program by June 30. The deadline for larger employers has passed and enforcement actions are underway.
What are the penalties for noncompliance?
According to the CalSavers FAQ, “each eligible employer that, without good cause, fails to allow its eligible employees to participate in CalSavers, on or before 90 days after service of notice of its failure to comply, shall pay a penalty of $250 per eligible employee.” An employer that hasn’t complied 180...
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