Join CEA, the Clovis Chamber of Commerce and Clovis Community College as we bring you the latest requirements regarding California’s recent mandatory 401k program. Beginning in June 2020 any business with 100 or more employees will be required to participate in California’s state sponsored retirement plan, CalSavers, or implement their own independently sponsored retirement plan for their business. Smaller businesses have a bit more time to get on board. The implementation deadlines are as follows:
June 30, 2020: Businesses with 100 + employees
June 30, 2021: Businesses with 50 + employees
June 30, 2022: Businesses with 5 + employees
CalSavers is Roth IRA plan and eligible employees will be auto-enrolled at 5% of their gross pay if they do not opt-out, or make an election. Their contribution will also be Auto-Escalated each year by 1% up to a maximum of 8%.
Employers need to be aware of how this mandate will impact their business. The penalties for non-compliance of the law is $250 per eligible employee if the employer remains non-compliant after 90 days from being served a notice. The penalty will increase an additional $500 per eligible employee if non-compliance reaches 180 days, or more after receiving a notice.
Speakers: Rob Cozzi Jr., CLF*, RICP*, Managing Director & Financial Advisor for Principal Financial Group, & Jessica Johnson, APA, Pension Consultant, Hicks Pension Services