Get ready California Business owners! 2020 brings forth several changes….
Beginning June 30, 2020 all California employers with more than 100 employees (that do not already offer a retirement plan) will be required to have registered with CalSavers, California's state run retirement program.
This will give millions of California employees access to a retirement savings plan through their job. Statistics show that Americans are 15 times more likely to save for retirement when they have access to a plan through work.
Employers will need to register their company and its employees, after which employees will receive an informational packet, then after a period of 30 days employees will be automatically enrolled into the program if they don't elect to opt out. Once enrolled, employees will have the option to choose their Roth IRA contribution rate, (which will be auto-deducted from their post-tax paycheck.) They will also have the ability to opt out and opt back in to the program at any time.
According to the CalSaver website, benefits to Employer's include: simple registration, zero fees or fiduciary responsibilities and ease of use with limited duties as a facilitator.
Employer Deadlines by company size:
More than 100 employees: June 30, 2020
More than 50 employees: June 30, 2021
5 (five) or more employees: June 30, 2022
Under Unemployment Code Section 1088.9(b), if an eligible employer (without good cause) fails to participate they will be hit with penalties upwards of $250 per eligible employee if noncompliance extends past 90 days after their notice