The deadline for California’s smallest eligible employers to register with the CalSavers Retirement Savings Program is December 31, 2025. This mandated retirement savings program is a crucial compliance point for private sector employers across the state.
Background: What is CalSavers?
CalSavers is designed to provide private sector workers who do not have access to an employer-sponsored retirement plan with a pathway to save for retirement. The program offers eligible employees access to a Roth individual retirement account (IRA), with a traditional IRA option available for those ineligible to contribute to a Roth IRA.
The law expanded the definition of an “eligible employer” on January 1, 2023, to include those with one or more employees. By law, these mandated California employers must register and facilitate specific program activities by the specified deadlines. These activities include:
- Submitting and removing employees.
- Submitting payroll deductions for participating employees each pay period.
Eligible employees have the option to opt in or opt out of the program at any time.
Exceptions to Participation Requirements
An employer is not required to participate in CalSavers if they currently offer a qualified retirement plan as part of their benefits package. Examples of qualified plans include:
- A 401(k) plan.
- A SEP plan.
- A SIMPLE IRA.
Employers who offer a qualified plan must still register with CalSavers to request an exemption.
Next Steps for Employers
The registration deadline for employers with one or more employees is fast approaching. Employers who have not yet registered must complete the process no later than December 31, 2025. Failure to register by the deadline could result in potential penalties of up to $750 per eligible employee.
To ensure compliance, employers should:
- Determine Eligibility: Confirm if your organization meets the definition of an eligible employer (one or more employees).
- Register or Claim Exemption: If you do not offer a qualified plan, register with CalSavers as soon as possible. If you do offer a qualified plan, register to claim your exemption from the program.
- Inform Payroll Provider: Ensure your payroll provider is aware of the CalSavers mandate. They will need to coordinate with the program to facilitate the required employee submissions, deductions, and remittance of funds each pay period for participating employees.
- Obtain Information: Employers can obtain more information on CalSavers and its requirements by visiting the CalSavers website.
