Retirement Plan Requirements and the CalSavers Program

CALIFORNIA EMPLOYERS

California requires that all employers with more than 50 California-based employees to provide access to a qualified employee retirement plan.  This law will expand next year to include all employers with 5 or more CA-based employees.  If your company does not offer an employer-sponsored retirement plan (e.g. 401k or similar), then you must participate in CalSavers, California’s state-run retirement savings program.

To learn more about CalSavers, you can reference their website here.

Eligible Employees

Any California employee of a participating employer, full-time or part-time, who is 18 years of age or older and will receive an IRS form W-2 confirming California wages paid by that employer, can participate in the CalSavers retirement savings program.  This includes production employees.

Note – Employees of CalSavers participating employers will be auto-enrolled in CalSavers unless they take action to opt-out of the program. More detail can be found in the employee portion of the CalSavers site here.

Why use CalSavers?

CalSavers was designed to give employers an easy way to help employees save for retirement, with no employer fees, no fiduciary responsibility, a requirement to match contributions, and limited ongoing administrative responsibilities.

Your Responsibilities as a CalSavers Participating Employer

As the Common Law Employer, it is your responsibility to comply with CA law and offer participation in CalSavers or a qualified retirement plan for your employees by the appropriate deadline. The CalSavers website FAQS state “For a motion picture production company that uses the services of a motion picture payroll services company, the eligible employer is the motion picture production company – not the motion picture payroll services company.”

As an employer participating in CalSavers, you will:

1. Register for CalSavers online.

2. Provide employee data for all employees to CalSavers within 30 days of hire date, and notify CalSavers when employees stop work.

3. Notify your employees that you are a CalSavers participating employer. Explain that CalSavers will contact the employee directly about their investment options. Explain that CalSavers uses auto-enrollment, so employees who don’t wish to participate must take action and opt-out of the plan. Provide employees with this flyer and this flyer on their date of hire.

4. Notify your payroll services company that you participate in CalSavers, and provide them with employee withholding amounts for each pay period.

5. Transfer the withheld employee contribution funds to CalSavers each pay period.

Penalties for Non-Compliance

Any eligible employer who has not begun offering either CalSavers or a qualified retirement plan by the deadline may receive a failure-to-comply notice. If non-compliance extends beyond 90 days from service of the notice, the employer will pay a fine of $250 per eligible employee. If non-compliance extends beyond 180 days from service of the notice, the employer will pay an additional fine of $500 per eligible employee.

Questions?

For more information about CalSavers, you can reference their FAQ page here, find resources and downloadable flyers here, or register for a webinar here. Talk to your in-house HR, Legal, and/or Payroll departments for guidance on how to update your hiring and payroll processes to meet the requirements of the law.

If you’re wondering about current or upcoming retirement plan requirements for employees outside of California, click here for a helpful list of current and upcoming legislation in other states.

How Revolution Can Help

Revolution can help with determining your employer eligibility and some administrative tasks, such as reporting.

If you are a Revolution payroll client and you have questions about how participation in CalSavers or another retirement plan will affect your payroll process, reach out to us at hrsupport@revolutiones.com.