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  • State-Run Retirement Savings Plan Gets OK; Mandatory Enrollment Coming in 2020

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    December 04, 2018

    California employers that don’t already offer a workplace retirement savings vehicle will be required to either begin offering one via the private market or provide their employees access to CalSavers, a state-run retirement savings plan, as early as June 2020.

    The CalSavers pilot program is open for employers to enroll; however, mandatory enrollment and contributions do not go into effect until 2020. Employers need not register until then, or later for smaller employers.

    Emergency regulations governing the CalSavers program were recently approved by the Office of Administrative Law.

    CalSavers is the result of 2016 legislation enacting the Secure Choice Retirement Savings Program (SCRSP) for private sector workers whose employers do not offer a retirement plan.

    The legislation requires employers with five or more employees that do not offer specified retirement plans to put a payroll arrangement into place that requires employees to contribute a portion of their salary or wages to a retirement savings plan in the SCRSP, unless they opt out.

    Employers that already offer a qualified retirement savings program will not be mandated to have their employees enrolled in the SCRSP. Employers retain the right at all times to set up and offer their own qualified retirement plan.

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