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CalSavers enrollment required by June 2022 for employers without a retirement plan

November 03, 2021 5468
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Dental practice owners and other employers who have 5 to 50 employees and do not already sponsor a retirement plan will be required by state law to enroll their employees in CalSavers no later than June 30, 2022. CalSavers is a Roth IRA voluntary retirement savings program for California workers who do not have access to a retirement plan at work.

Employees may choose not to participate or to reduce or increase their payroll contributions, but employers must facilitate initial enrollment for current workers and new hires (within 30 days of hire) and send payroll deductions to CalSavers for each worker who does not affirmatively opt out of participating in the program. Full-time, part-time and temporary workers are eligible for enrollment.

California employers with 51 to 100 employees were required to register by June 2021, and employers with more than 100 employees had until September 2020, as CDA first reported in 2019.

Employers do not pay any fees for participating in the program, and they are prohibited from contributing to employee accounts. 

Update June 14, 2022: CDA published a resource on CalSavers that explains how to register and covers questions about exemption, employee qualification, penalties for noncompliance, employers’ administrative duties and more. 

A ‘simple and effective way for employees to save’

Established through 2016 legislation as the CalSavers Retirement Savings Trust Act, the program is intended to be a “simple and effective way for employees to save.” CalSavers accounts have a default savings rate of 5% of the employee’s gross pay, but employees can change their rate at any time. 

Eligible employers may be fined under the Unemployment Code if they do not currently offer a retirement savings plan and fail to allow their eligible employees to participate in CalSavers.

Small employers can register early without penalty to allow employees to begin saving now.

6/6/22 update: Dentists who already sponsor a retirement plan for employees can report their exemption on the CalSavers website to stop receiving the state's communications about the program.

Sponsoring your own retirement savings plan 

Employers in California have the option of sponsoring their own qualified retirement savings plan instead of using CalSavers. CDA’s vetted partner HR for Health covers the ins and outs of both options, including which private plans qualify in California and how to get started creating a retirement plan — beginning with some research and administrative considerations.

The CalSavers registration deadline and other upcoming and past compliance deadlines for dental practices are available in one place on CDA’s website for easy reference. Visit the ‘Are You in Compliance?’ webpage for details about deadlines related to required notices, continuing education, new permit requirements for general anesthesia and sedation and more. 

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