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New Law Requires Retirement Plan for Groups with 5+ Employees – June 30, 2022 Deadline

Mar 21, 2022, 2 Minute Read

There is a new law going into effect that will impact small employers with more than 5 California-based employees. The law is already in effect for groups with 50+ employees and will go into effect June 30, 2022 for employers with 5-49 employees.

Summary

• All employers with 5 or more California-based employees (at least one of whom is age 18) are affected.
• The law is meant to help more people save more money for retirement with a convenient payroll deduction.
• The new CalSavers law requires employers to join the CalSavers Retirement Savings Program, unless they’re exempt because they have a 401(k), 403(b), SEP IRA, or Simple IRA retirement plan.
• If the employer has one of the above retirement accounts in place by June 30th, they may request an exemption from the state and may opt-out of CalSavers. They can do that on the CalSavers website.
• If the employer wants to set up an employer-sponsored retirement plan, we can help you facilitate that through our partner Principal.
• If the employer does not want to set up their own retirement program, they simply need to register for CalSavers by the deadline. The employer does not need to contribute money toward the account, nor answer any questions about retirement. CalSavers will do that. The employer will be responsible for facilitating the payroll deductions for CalSavers.

Resources

• California State Treasurer’s Summary of The CalSavers Retirement Savings Program
• CalSavers Retirement Savings Program – Employers Website

Questions?
Contact The Answer Team at 800.696.4543 or info@claremontcompanies.com.

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