At the start of the month, California launched its retirement program statewide (a pilot program began in November 2018). Employers with a set number of employees must provide retirement benefits…through private plans or by enrolling employees in the state’s program called CalSavers. By default, 5% of employees’ pay is automatically contributed to CalSavers, increasing annually by 1% until reaching 8% (employees can opt for a different contribution rate). No employer contributions are required. Smaller employers, as well as self-employed individuals, can choose to enroll. It is unclear at this time whether CalSavers is subject to federal law governing retirement plans (ERISA).
Barbara Weltman
Big Ideas for Small Business, Inc.
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