CalSavers Deadline – Last Chance to Avoid Penalties for Small Employers With No Retirement Plan

By: Tamara B. Pow, Esq.

CalSavers is a California retirement savings program for employees that do not have a retirement plan through their employer.  If your business has a qualified retirement plan, you are exempt and may not enroll in CalSavers.  However, if your business averaged five or more employees in 2021 (including part time and seasonal employees) and at least one employee is 18 years or older, and you do not have a retirement plan for your employees, you must register for CalSavers by June 30, 2022. (Larger companies were required to register in 2020 (100+ employees) and 2021 (50+ employees)).

Companies formed after July 1, 2019 will be notified by CalSavers when they have had five or more employees for a calendar year, and must register by December 31st of the year of notification.

Once you enroll, your employees will be contacted by CalSavers.  Employees can opt out of this Roth-like savings program.  However, you should let your employees know that they should expect to be contacted by CalSavers and that if they fail to respond CalSavers will automatically enroll them for a 5% contribution rate for the first year, increasing by 1% a year until it hits 8%.

Employers will be required to collect, remit and report contributions.  Failure to comply will result in penalties payable to the Franchise Tax Board.

Register your business at or contact a retirement adviser to get a qualified retirement plan in place for your business.

This blog is written as of May 5, 2022. Recommendations and legal requirements are changing rapidly, so please continue to review our legal updates or review postings on relevant government websites.

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