In response to a nation-wide retirement crisis, many states are rolling out their own retirement plans. Joining the ranks of Oregon, Illinois, and others in releasing a state-sponsored IRA savings program, California Senate Bill 1234 officially mandated that all California employers with 5+ employees offer a retirement savings plan, beginning 2020 for the largest employers.
The deadline for offering retirement plans depends on how many employees a business has. The
If you have over 100 employees, you have until June 30,
If you have over 50 employees but under 100, you have until June 30,
If you have over 5 employees but under 50, you have until June 30,
Companies can either use a private retirement plan and administrator through the private market or register with California’s own new program called CalSavers
The CalSavers program deducts 5% from the employee’s paycheck into a retirement account, with the savings rate increasing 1% yearly up to 8%. The retirement account is a Roth IRA, which means that the employee will not pay taxes withdrawing from the account, but contributions to the account are not
The only thing employers have to do is submit the contribution to the account and add or remove employees. There is no fee to employers to register or use the program. The program itself is