In 2016, California passed legislation stating that employers who do not sponsor an employee-retirement plan must participate in a state-run retirement program. This program became known as CalSavers.
While there have been legal challenges to CalSavers, the program persists. CalSavers provides an opportunity for employees to defer wages, through payroll deductions by the employer, to a state-run individual retirement savings account program.
An employer is not required to participate in CalSavers if it sponsors or participates in a retirement plan, such as a 401(k) or pension plan. To be exempt from CalSavers, an employer may sponsor a retirement plan for any of its employees. California employees need not enroll in the retirement plan for the employer to be exempt.
