Retirement plans are something employers have offered for decades as an employee benefit. However, in 2025 the requirement to have one in California will become a reality for all employers with one or more employees.
CalSavers was created in 2016 and began being implemented in 2019. It is California’s state-sponsored retirement savings program and helps facilitate employees’ personal Individual Retirement Account (IRA) contributions that remain with them throughout their career, regardless of job changes. Employers must facilitate the program by registering with CalSavers and transmitting employee contributions, but they do not have any fiduciary or administrative duties beyond this.
By December 31, 2025, Employers with one to four employees must register with CalSavers or certify their exemption. (Larger employers were required to register on or before December 31, 2024.) These smaller employers will begin receiving official registration information via mail and email starting in February 2025, but information can be found currently at CalSavers website: www.calsavers.com. Businesses without any employees other than the owners, and government entities, religious organizations, and tribal organizations, are exempt from registering.
To comply with the CalSavers mandate, eligible employers must either (a) register their business by the specified deadline or (b) offer a qualified retirement plan through the private market. Failure to comply may result in financial penalties, including fines of $250- $500 per eligible employee for noncompliance. Employers can register or certify their exemption on the CalSavers website. While CalSavers does not offer the benefits of “traditional” employer-sponsored plans (such as matching contributions) it does provide the benefit of not having administrative costs other than the aforementioned need to facilitate employees’ contributions.
If you have questions about CalSavers or other employment-related questions, please contact Ryan Stahl at [email protected] or any other members of our team including Denis Kenny at [email protected], John Lough at [email protected] or Jaclyn Tran at [email protected].
-Written by Ryan Stahl