State Mandated Retirement Plans - Are you ready
The State of California has implemented a state retirement mandate that requires all businesses that employ five or more employees to offer a qualified retirement plan or register with the state option, which is called CalSavers. Employers with 50 or more employees had to offer a qualified retirement plan or register with CalSavers prior to Jun 30, 2021. Employers with 5 or more employees must register with CalSavers or offer a qualified retirement plan prior to June 30, 2022. A qualified retirement plan includes a401(a), 401(k), 403(a), 403(b), 408(k), 408(p) or 457(b). If a company does not offer a qualified retirement plan or register with CalSavers, they will face fines.
CalSavers is an option for small businesses that do not offer a qualified retirement plan. All contributions to the CalSavers plan are employee deductions that are automatically set at 5% of the employee’s gross pay. No employer matching contributions are required. The employee can adjust their contributions setting to a higher or lower percentage of their gross pay. Employees can also opt-out of the state retirement savings program but will have to re-opt out every two years.
To learn more about CalSavers, please click on the attached link: https://employer.calsavers.com/home/employers/program-details.html
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