Governor Gavin Newsom signed legislation sponsored by Treasurer Fiona Ma to expand access to the CalSavers Retirement Savings Program to an estimated three-quarters of a million workers in California. Senate Bill (SB) 1126, authored by Senator Cortese (D-San Jose), expands the CalSavers mandate to most employers in the state, which requires them to join the program if they do not sponsor a retirement plan.
“This bill is a major step toward improving retirement security for all working Californians.” said California State Treasurer Ma, who chairs the CalSavers Retirement Savings Board. “For the business community, this bill ensures the smallest employers will no longer be excluded from a valuable tool for employee recruitment and retention.”
Starting January 1, 2023, nearly all employers will be able to participate in CalSavers. The bill expands the mandate to any employer with at least one employee who is not also the owner of the business. Mandated employers with fewer than five employees have until December 31, 2025, before they are required to register.
“SB 1126 will ensure that nearly every working Californian has access to a workplace retirement savings program.” said Senator Dave Cortese (D-San Jose), author of SB 1126. “By assisting both employers and employees, this legislation will help millions of Californians save for their future so that they can retire with security and peace of mind.”
So far, more than 106,000 employers have joined CalSavers. An overwhelming majority of those employers have fewer than 50 employees. Employers of all types are already participating in CalSavers, from large employers with several thousand employees to small mom and pop shops.
For Sacramento-area restaurant owner Randall Selland, joining CalSavers was an easy choice to make. “This is a win-win-win for employees, business owners, and taxpayers,” said Selland. “The more we can encourage workers saving their own money now, the better off we’ll all be in the future as fewer people will need public support. And as a business owner, it helps me recruit and retain employees to have this opportunity for retirement planning.”
In 2012, California was the first state in the nation to pass legislation establishing an automatic enrollment retirement policy for private sector workers who lack access to work-based retirement plans. Authorized in final form in 2016 by Senate Bill 1234 (de León), the program began a limited pilot phase at the end of 2018 and launched fully statewide on July 1, 2019. CalSavers seeks to facilitate the largest expansion of retirement security since the advent of Social Security in the 1930’s and is already a model for a growing number of states seeking to establish a similar program. Learn more at www.calsavers.com.