Do you have retirement savings? If you don’t, you are hardly alone. 49% of adults ages 55 to 66 had no personal retirement savings in 2017, according to the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP).
That’s $0.00 in the bank to live on if they ever stop working to earn enough money to keep a roof over their head, food in the fridge and to pay doctor bills. Medicare and Social Security certainly help (thanks, Democrats!), but you’ll have to live somewhere awfully cheap to live on the $3,000 to $4,000 a month that a well-paid worker would be eligible for. You’re going to need more, especially if you’ve been running up credit card bills to fund your life now. You may have to work for the rest of your life, if you can.
To address this problem, in 2012 California passed SB 1234, which mandated that employers with five or more employees offer their employees the ability to fund retirement savings via a payroll deduction, and created the California Secure Choice Retirement Savings Trust (aka, CalSavers) to administer a public program making it easy for employers to comply.
So bottom line, employers have to offer a retirement savings payroll deduction option that the employee directs to their preferred financial institution, or to the CalSavers program, which is designed to be both simple to implement and the financial institution of last resort. There is no cost to employers, but the final deadline for compliance by small businesses is June 30, 2022. Employers with 50 – 99 employees had to set it up by June 30, 2021, and those with 100 or more had to have it in place by September 30, 2020.
The state has started enforcing the law among large employers; non-compliant employers will be penalized $250 per employee upon the first penalty notice and, if noncompliance persists another 90 days, an additional $500 per employee, for a total of $750 per employee for sustained non-compliance.