Today we are going to talk about CalSavers. Here are 5 things you should know:
1. July 30, 2021 Deadline for Employers with 50 or more Employees
- CalSavers went into effect on September 30, 2020 for employers having 100 or more employees. On June 30, 2021 employers with 50 or more employees will need to ensure they meet all the necessary requirements.
2. Be Prepared for Additional Administration Tasks
- Provide 30-day notice to employees
- Administer employee enrollment and termination
- Track account details
- Submit participating employee contributions via payroll deduction
- Update Contribution rates including auto-increases
3. No Tax Benefit for Opting Into the Plan
- You cannot contribute to match employee contributions and therefore receive no tax deductions. However, there is no cost to register for the program.
4. Automatic Enrollment and Increase
- If employees do not opt-out, employees will be automatically deducted 5 percent and will automatically escalate by 1 percent up to a maximum of 8 percent.
5. Risk of Fines
- If you fail to provide a retirement plan or register for CalSavers by the deadline date you risk the fine of $250 per eligible employee if they are not compliant within 90 days of the noted deadline. An additional fine of $500 is imposed if they are not compliant after 180 days, for a total of $750 per employee.
There are several additional requirements to consider and prepare for in order to save you from any administrative burden – please contact our FLORES HR & Payroll Department to learn how FLORES can help you. Give us a call today at (619) 588-2411.