A new state workplace retirement savings program, CalSavers, will open to an estimated 250,00 to 300,000 employers on July 1 — offering an automatic IRA payroll deduction for the 7.5 million California workers with no retirement plan on the job.
The massive program, expected to handle billions in savings, is voluntary for employees. If they don’t opt out in 30 days, they are automatically enrolled. Once in the plan, they can opt out at any time, and then opt back in if they choose.
For businesses with five or more employees, the program is mandatory. They must offer employees CalSavers, or a qualified retirement plan chosen by the employer, to avoid a penalty for repeated non-compliance of $750 per employee.
CalSavers opens July 1 to all eligible employers and to the self-employed on Sept 1. Compliance deadlines begin for businesses with over 100 employees June 30, 2020; over 50 employees June 30, 2021, and five or more employees June 30, 2022.
The CalSavers goal is to help the nearly half of all California workers, with little beyond Social Security, who are projected to retire into hardship. Their average annual income is $35,000. Two-thirds work for businesses with less than 100 employees.Read More Here.