Many Americans worry that they are under-prepared for retirement, citing insufficient savings and a rising cost of living. Even worse, according to the Federal Reserve one quarter of working adults have no retirement savings at all. In many cases that’s because their employers do not offer a retirement savings plan.
The state of California hopes to change that situation for its citizens. The state launched CalSavers on July 1, 2019, along with legislation requiring most employers to provide a retirement benefits plan for their employees. While employers are not required to use the CalSavers program, and can choose from many other options available on the market, all companies employing more than five workers will be required to offer some form of retirement plan.
The law has been phased in over time, starting with larger employers. Those with over 100 employees had until September 30, 2020 to enroll in a retirement benefits plan. Then, companies employing between 51 and 100 people were required to comply by June 30 of this year.
Now, the last group of employers are in the spotlight. Companies employing five or more employees must provide a retirement benefits plan or enroll in CalSavers by June 30, 2022.
The law is enforced by penalties of $250 per employee, and additional penalties for sustained non-compliance.
Even though the deadline is more than nine months away, now is the time to begin comparing retirement benefit plans. Not only will early shopping give employers more time to make the best decision for their situation; making workers happy helps to ensure company loyalty and attract top talent.
Call our office now to discuss your retirement plan options, and we will help you compare the different types of plans available to you. Our retirement planning experts can explain the CalSavers program, and together we will make the decision that is right for your company.