Read this (and view video links) to learn what you need to do in your payroll system to accommodate the CalSavers program deductions.
CalSavers is a unique, California Retirement Savings Plan that employers can elect to enroll in order to meet California’s requirement that Employers provide a retirement plan to employees. Because this plan is administered by the state of California, Employers do not have as much administrative control—so there are some things you will need to add to your payroll processes to ensure your employee records are compliant and accurate.
Requirement: You must enroll new employee in CalSavers within 30 days of hire date
While normal 401k plans allow the employer to define the waiting period and enrollment dates, CalSavers has a waiting period of up to 30 days (note, you must add the employee BY the 30th day of employment). We recommend simply adding this task to your Administrator’s New Hire Checklist or creating a reminder.
How to add Savings Plan Deduction to your employee’s account:
Requirement: After enrollment, employee has 30 days to decline or modify their contribution from the standard contribution added during enrollment.
Normal 401k plans require that the employee define the contribution amount. CalSavers has a default contribution added to the employee’s account when you add them to your account. The employee must login and modify their contribution. You cannot modify the contribution for them and can only modify the contribution after receiving a notification from CalSavers that the employee has elected to do so.
Here’s how to modify Employee Savings Plan Deduction in your employee’s account:
Requirement: Employers must remit Employee Savings Plan contributions to CalSavers within 7 days.
Simply add this step to your payroll process and follow the instructions or contact us so we can remit payment on your behalf as a vendor. Note you will need to provide us vendor access to your Cal Savers account.
FYI: This article was drafted 6/2021 and was written when the information as defined by Calsavers at that time. You should always refer to the CalSavers website directly for all plan information, processes, and requirements.