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I Received a Letter from CalSavers

Updated: Sep 26, 2022

I just received a letter from CalSavers. Am I required to provide retirement benefits to my employees?

Likely, yes. In September 2016 Governor Jerry Brown signed SB 1234 which requires California employers to offer retirement benefits to their employees. This requirement started in 2020 for employers with over 100 employees. Employers with over 50 employees started in 2021. And by June 30, 2022 all employers with 5 or more employees must offer retirement benefits to their employees.

What is CalSavers?

CalSavers is a retirement solution free to employers and provided by the state to help employers meet their obligation with this new law. CalSavers provides ROTH IRA retirement accounts to employees. Employers enrolled with CalSavers are required to report their employees and new hires to the program on a regular basis. Employees are then automatically enrolled, and after 30 days employers must begin withholding 5% of a worker’s paycheck and report the amounts to the program after every payroll. At the start of each year thereafter, employee contribution rates automatically increase by an additional percentage point up to a maximum rate of 8%.

Can employees opt out?

Yes. Once an employee is added to the CalSavers system they will receive notification directly from CalSavers giving them access to their retirement account. Employees can call or log in to CalSavers at any time and request to opt out or change their contribution rate.

Are there penalties for non-compliance?

Yes. Per Government Code Section 100033(b), each eligible employer that without good cause, fails to allow its eligible employees to participate in CalSavers, on or before 90 days after service of notice of its failure to comply, shall pay a penalty of $250 per eligible employee if noncompliance extends 90 days or more after the notice, and if found to be in noncompliance 180 days or more after the notice an additional penalty of $500 per eligible employee.

I already offer retirement benefits to my employees, do I need to do anything?

Yes. If you receive a letter from CalSavers inviting you to register, you must register anyway. During the registration process you can indicate that you already offer retirement benefits to your employees and are exempt from CalSavers.

How do I inform my employees about CalSavers?

The CalSavers website provides template letters you can give to your existing employees and include in your new hire onboarding packet that informs employees of the program.

You can also update your Labor Poster to help inform employees.

What are the employer’s obligations within the CalSavers program?

After registering with CalSavers, employers must provide employee census data for existing employees and whenever a new employee is hired. At the end of every pay period, employers must log into the CalSavers website and check for deferral changes. Employers must update these changes in payroll before being processed for that pay period. After payroll is processed, employers must log back into the CalSavers website and enter the employee contributions from payroll. CalSavers will automatically collect these amounts from the employer’s bank account and deposit them into the employees’ CalSavers accounts.

Can ABC Workforce help with any of this?

Yes! If you are an ABC customer you have two options:

1. Self Administration: There are no fees from ABC if you administer the plan yourself. ABC will set up the CalSavers deduction code for you in payroll but all administrative tasks must be performed by you including census data uploads, deferral rate change downloads, contributions uploads, and resolutions of problems with CalSavers.

2. ABC Administration: For a small monthly fee ABC will administer the plan for you. For most organizations this will be the best option. There is also a one time setup fee which can be waived for early adopters.

How do I get started with ABC Administration?

Send an email to and he will quickly respond with a step by step guide showing how to register with CalSavers and add ABC as your payroll administrator.

My current payroll provider doesn’t have a way to administer CalSavers for me and I don’t have the time to do it. Can ABC help?

Yes! Simply switch payroll services to ABC and we will be happy to relieve you of that task.

My current payroll provider has made a mess of things with CalSavers. Can ABC help?

Yes! Simply switch payroll services to ABC. Our system integration with CalSavers is automatic and in the cloud. Changes in one system are automatically notified in the other system. This significantly reduces the chance for errors and problems.

I have more questions. Who should I contact?

Call (877) 297-5460 and ask for Dave Shaw. Or send him an email at

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