California Employers: If you have 5-50 Employees You Must Offer a Retirement Savings Plan by June 30, 2022
California Employers: If you have 5-50 Employees You Must Offer a Retirement Savings Plan by June 30, 2022
Employers of five or more employees in California take heed: you must offer employees a retirement savings program by June 30th. That does not mean that you have to start a 401k program. You can offer employees access to CalSavers[1]. Employers’ obligations will be to register with the State, provide updated information to the State regarding current employees, and forward employment contributions to the State through payroll deductions. Easy Peasy. There are no maintenance fees at CalSavers. And this is an employee paycheck deduction program only; employers cannot contribute to the employee account, be involved in investment choices, or even weigh in on the employee’s choice to participate or not.
Within 30 days of registration, employers must upload a full list of eligible employees to the CalSavers website. Then, Employers must begin sending payroll contributions no later than the first payroll period 30 days after the list was uploaded. For those employees who are enrolled in CalSavers, employers deduct an employee designated percentage of their wages and transmit those amounts to the State, which will maintain each employee’s account. For more information go to https://www.calsavers.com/.
Employers that currently offer their employees a Tax-Qualified Retirement Plan do not have to register. But employers that are required to register face a $250/employee penalty for failing to do so. While there are some “good cause” excuses for untimely registration, those excuses are limited. If you receive a failure to comply letter, feel free to call us because Employers that still fail to comply after notice will be subject to an additional penalty of $500 per eligible employee. If you have any questions, please contact Dawn at: dcoulson@eppscoulson.com.
Information contained in this Memo is intended for informational and educational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney. It is likely considered advertising. Epps & Coulson, LLP encourages you to call to discuss these matters as they apply to you or your business.
EPPS & COULSON, LLP
Attorneys admitted to practice in California, New York, Colorado, Texas, and Oregon
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