On July 1, California launched an ambitious state-sponsored retirement program for the private sector.
California became the third state behind Oregon and Illinois to offer a state-sponsored retirement plan for employees who are not provided one through their workplace. Called “CalSavers”, the mission being to ensure all Californians have a path to financial security in retirement by providing a simple, portable, low-cost way for workers to invest in their futures. CalSavers is free for employers and takes all of the legal and administrative burden off of them. For employers, the number of employees determines the registration deadline. Currently those that have at least 5 employees and do not offer a retirement plan, must register now. For a complete overview to the plan and filing dates click here.
In addition to providing a simple avenue for Californians to save for retirement, the plan is also designed to make it as seamless as possible for California employers to administer.
Here are some features:
- Free for employers to register
- CalSavers will select the investment options
- Employees are automatically enrolled in a Roth IRA
- No matching contributions
For more information about what CalSavers can offer both employees and employers read the full article from the Los Angeles Times.