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CalSavers – What are my Options?


CalSavers – What are my Options?

Many employers don’t sponsor retirement plans, which leave many workers without a vehicle to save for retirement. The state of California has created a phased mandatory program to cover all employees in the state with an employer sponsored plan.  If you have more than 100 employees, the deadline was 9/30/20. More than 50 employees, the deadline is 6/30/21. Five or more employees, 6/30/22.



What are the benefits of CalSavers?

  1. No employer fees

  2. No investment management responsibility

  3. Participants get into a retirement savings program



What are the drawbacks to CalSavers?

  1. No guidance for you and your employees

  2. No opportunity for match or profit sharing

  3. Limited contributions for participants

  4. No flexibility in plan design and participation eligibility



There are distinct benefits to choosing a Privately Sponsored Plan

  1.  Flexibility: Private plans have additional plan design features that help you reward your most loyal employees for their length of service and contribution to the success of your business.

  2.  Plan Design: The retirement plan must always be run for the benefit of the participants; however, plan designs can be implemented to help owners enhance their savings.

  3.  Cost Effective: Private plans can be very cost-effective and utilize low-cost investment options.

  4.  Investment Guidance: CalSavers uses a fixed lineup of investments for you and other participants in the plan. Private plans can offer more tailored lineups that can lead to better outcomes for the participants.

  5.  Tax Incentives: Plan costs and employer contributions associated with private plans are tax deductible, making them an affordable option.

What’s right for our company?

If you would like to explore your options, please email Matt Delaney at JDH Wealth Management or call him at 707-542-1110. He can help you determine if a Privately Sponsored Plan would be something of value for you and your employees.



I already have a Privately Sponsored Plan

If you already have one of the Qualified employer sponsored plans listed below, you meet the requirements and do not need to participate in CalSavers. You must, however, register your exemption to the program, which can be done here.

  1. 403(a) or 403(b) plans

  2. 408(k) SEP plans

  3. 408(p) SIMPLE IRA plans

  4. 401(a) Qualified plans

  5. 401(k) Plan

  6. Payroll deduction IRAs with automatic enrollment

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