Nonprofit Resources

print
5.21.21 | , |

CalSavers Deadlines for Organizations with California-Based Employees

print
Organizations that have employees in California and do not offer an employee retirement plan need to be aware of upcoming registration deadlines for the CalSavers Retirement Savings Program. CalSavers is California’s new automatic enrollment payroll deduction IRA program.

Under California state law, if your organization has five or more California-based employees, at least one of whom is age 18 or older, and you do not sponsor a qualified employee retirement plan, you must register to facilitate the CalSavers program for your employees. There are no fees for employers, but there are penalties for noncompliance.

Note that religious organizations are exempt from the state law establishing CalSavers, but other nonprofit organizations are not.

According to the CalSavers website, qualified retirement plans include:

  • 403(a) – Qualified Annuity plans
  • 403(b) – Tax-Sheltered Annuity plans
  • 408(k) – Simplified Employee Pension (SEP) plans
  • 408(p) – Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA plans
  • 401(a) – Qualified Plans (including profit-sharing plans and defined benefit plans)
  • 401(k) plans (including multiple employer plans or pooled employer plans)
  • Payroll deduction IRAs with automatic enrollment
Deadlines

Registration deadlines are based on the average number of employees throughout the year. This is calculated by averaging the number of employees reported to the California Employment Development Department on your four most recent Form DE 9C filings.

The deadlines are as follows:

  • Eligible employers with more than 50 employees – June 30, 2021
  • Eligible employers with five to 50 employees – June 30, 2022

The deadline for eligible employers with more than 100 employees was September 30, 2020.

Volunteers who are not considered employees under California state law are not included in an organization’s employee count.

Penalties

There are penalties for noncompliance. According to the CalSavers website, under Government Code Section 100033(b), an eligible employer that “without good cause, fails to allow its eligible employees to participate in CalSavers” and does not comply within 90 days of receiving a notice will receive a penalty of $250 per eligible employee.

Employers found to be in noncompliance 180 or more days after receiving the notice will face an additional penalty of $500 per eligible employee.

Next Steps

Employers can learn more and register at calsavers.com. There are no fees for employers.

We recommend that you contact your local legal counsel with questions.

Learn more about our Employee Benefit Program audit and consulting services on our website.

Leave a Comment