California is mandating a retirement savings program for private sector Companies who currently do not offer a retirement plan. This mandate is being phased in, but going forward the below employers who don’t offer a retirement plan must participate in CalSavers or face possible financial penalties*.
Deadlines are based on company size. The implementation deadlines are as follows:
- Sept. 30, 2020: Businesses with 100-plus employees
- June 30, 2021: Businesses with 50-plus employees
- June 30, 2022: Businesses with five-plus employees
If the Company does not already have a qualified plan in place, to comply they will need to follow the requirements below:
- Companies must register their business with CalSavers. Once registered, they have one year before the mandated deadline stated above.
- Company contributions will not be permitted and will be required to enroll eligible employees and submit employee contributions.
- Employees will be automatically enrolled unless they go on CalSavers and decline.
The Pasadena Chamber offers an alternative to CalSavers
- Multiple Employer 401(k) Plan (MEP)
- Companies may choose their own amounts to contribute to the plan
- Employees may enroll or decline with their employer under the Chamber MEP plan. They are not required to enroll.
- Transamerica Retirement will provide the platform and administrative channels to automatically process contributions and other transactions.
Click here for an overview of the Chamber MEP 401K plan. Please feel free to reach out for more information:
Contact Bryan Muth C(k)P®, CRPC®, CRPS®, CPFA®; Managing Partner, Director of Retirement Plans; Pasadena Private Wealth, 626-993-9303, or bmuth@pasadenapw.com, 2 N. Lake Ave Suite 520, Pasadena, CA 91101, www.pasadenaprivatewealth.com
*Employers could face financial penalties for not having a retirement savings plan available for eligible employees to join. The proposed fines range from $250 per eligible employee if an employer remains noncompliant after 90 days of being served notice, escalating to $500 per eligible employee if noncompliance reaches 180 days or more after the notice.