What You Need to Know
- Employers without a retirement plan and more than 100 employees could be penalized $250 per employee.
- CalSavers will start mailing penalties this month.
- The deadline for businesses with more than 100 employees was Sept. 30, 2020.
California announced Wednesday that it will begin fining employers in January if they fail to register for the state’s auto-IRA, the CalSavers Retirement Program.
“We strongly urge employers to come into compliance now before we mail penalties this month,” said Katie Selenski, CalSavers’ executive director, in a statement. “Our service representatives are standing by to assist you and the vast majority of employers find it easy to comply.”
Employers failing to register that do not offer a private retirement plan and have more than 100 employees will be penalized $250 per employee.
“The very first notices to that group [employers with more than 100 employees] were sent out today, by paper mail,” Selenski told ThinkAdvisor in a phone interview. “We’re starting with a small group of 20 employers.”
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“In about 10 days,” she continued, “we’ll send the next 200 employers their penalties.”
During the first week of February, another 161 employers will get their notices, she said.
As of Thursday, 381 employers have been “completely unresponsive,” Selenski said, while “281 have registered but have failed to complete the onboarding process.”
Employers will have 90 days to register for CalSavers after receiving their first notice; if they fail to register, an additional $500 per employee will be assessed, she said.