SACRAMENTO October 11, 2019 – The first round of notices about how to participate in the state’s pioneering new retirement savings program, CalSavers, is being sent to employers this week.
“The sooner employers register, the sooner their workers can begin saving for their futures,” said State Treasurer Ma, chair of the California Secure Choice Retirement Savings Investment Board.
More than seven million Californians are currently on their own when it comes to saving for retirement. Many employers that don’t offer a plan report struggling with administrative responsibilities, fiduciary responsibility, and additional costs that come with providing an employer-sponsored plan.
“CalSavers addresses these challenges head-on by bringing a portable retirement savings option to workers who don’t currently have one through their employer,” said CalSavers Executive Director Katie Selenski. “The program is simple to operate and has no fees for employers and no cost to taxpayers.”
Studies show people are 15 times more likely to save for retirement if they have the tools to do so through their employer. By law, every California employer with five or more California-based employees who doesn’t offer an employer-sponsored retirement plan will be required to register for CalSavers by deadlines rolling out over the next three years according to employer size.
Employers with more than 100 employees who do not already offer a retirement plan will have until June 30, 2020 to register. Employers with more than 50 employees will be required to register by June 30, 2021, and those with five or more employees by June 30, 2022.
Employers are only responsible for providing the CalSavers program with their employee roster and then remitting employee payroll contributions each pay period.
“We take care of informing employees and interacting with them about their accounts,” Selenski said. “This is a pioneering program that levels the playing field and gives workers a way to save for a dignified future.”
Eligible employers of any size are encouraged to register at any time starting now, regardless of their registration deadline, at www.calsavers.com.
Once enrolled, employees can choose their own contribution rate, up to the federal annual maximum of $6,000 for those under age 50 and $7,000 for those over age 50—the same as any IRA—with deductions automatically made from each paycheck.
Participating employees are automatically enrolled at a savings rate of five percent per paycheck; however, individuals can choose their own savings rate and investments or opt out at any time. Participant fees are low and expected to shrink further as the program grows to scale. Accounts stay with employees, even if they change jobs.
“Gig” Worker Opt-in Portal Open Today
Starting today, self-employed individuals, “gig” workers, and people who work for non-mandated employers may also sign up for a CalSavers account by directly linking their bank account at www.calsavers.com.
“Portability is increasingly important in today’s economy and everyone should have a consistent way to save regardless of the ups and down of work,” said Treasurer Ma.
About the CalSavers Retirement Savings Program
The CalSavers Retirement Savings Program (“CalSavers”) is an automatic enrollment payroll deduction IRA overseen by the California Secure Choice Retirement Savings Investment Board (“Board”). CalSavers is operated as a public-private partnership, with oversight by a nine-member public board chaired by the State Treasurer and management by a small staff based in Sacramento. For more information about CalSavers, visit www.calsavers.com, email CalSavers@sto.ca.gov, or follow the program on Twitter at @CalSavers.