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CalSavers to Cover Nearly All Employees in California

State Auto-IRA Plans

CalSavers, the state-run program that provides retirement plan coverage to private-sector employees whose employers do not, will cover nearly all such employees in the Golden State.

Gov. Gavin Newsom (D) on Aug. 26 signed legislation further expanding the program.

S. 1126 expands the definition of “eligible employer” for purposes of the CalSavers Retirement Savings Trust Act to include a person or entity that has:

  • at least one eligible employee; and
  • satisfies the requirements to establish or participate in a payroll deposit retirement savings arrangement.

The state Senate passed the bill on May 27; the Assembly followed suit on Aug. 11.

Starting Jan. 1, 2023, nearly all employers will be able to participate in CalSavers. Employers with fewer than five employees will be required to register after Dec. 31, 2025, if they have not already done so.

California State Treasurer Ma, who chairs the CalSavers Retirement Savings Board, in a press release hailed the measure as “a major step toward improving retirement security for all working Californians.” She added that, “For the business community, this bill ensures the smallest employers will no longer be excluded from a valuable tool for employee recruitment and retention.”

It is estimated that the measure will expand CalSavers coverage to an additional 750,000 employees in California. More than 100,000 employers have joined CalSavers so far; the state Treasury reports that the “overwhelming majority” of them have fewer than 50 employees.