California Senate Bill 1234 (SB-1234) was signed into law way back in 2016 and requires California employers, that do not sponsor an employee-retirement plan, participate in the state administered retirement program, CalSavers.
The requirement has had a staggered rollout with the ‘pilot’ phase being launched in 2018 and the phase-in period that began in 2020. By June 30, 2021, the mandate will require employers with 50 or more employees, with one or more of these employees being over the age of 18, to comply.
- September 30, 2020– Employers with 100+ employees are required to have enrolled OR offer a qualified plan
- June 30, 2021– Employers with 50-99 employees are required to have enrolled OR offer a qualified plan
- June 30, 2022– Employers with 5-49 employees are required to have enrolled OR offer a qualified plan
Employers that fail to offer a qualified retirement plan or enroll in CalSavers may be fined by the California Franchise Tax Board.
What does this mean?
Employers with 50 or more employees are required to:
A. Offer a qualified retirement plan; or
B. Enroll in CalSavers.
What if I already have a plan in place?
· Employers that offer a qualified retirement plan may have received notification from CalSavers requesting enrollment. If this is the case:
- Log on to the CalSavers site.
- Have your Federal Employer Identification or Tax Identification Number, business address and/or phone number available.
- Register for the exemption.
· If you did not receive notification from CalSavers and want to ensure that the exemption is in place, call CalSavers to confirm the qualified plan is listed and the exemption has been applied.
The registration for your company exemption only needs to be completed once unless you eliminate your plan. If you eliminate your qualified retirement plan, you will then be required to replace it or enroll with CalSavers.
What if I do not have a plan? Am I required to enroll in CalSavers?
- No. You can opt to offer your own qualified plan and TPPS recommends that you explore these options as private qualified retirement plans are often more favorable for your employees.
- However, if you do not plan to offer a qualified retirement plan, you are required to enroll in CalSavers. Log on to the website and register your company using the information provided as well as your Federal Employer Identification or Tax Identification Number, business address and/or phone number.
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