CalSavers Retirement Savings Program

CalSavers was launched in 2019. Registration took place in three waves. All employers with five or more employees must have registered by June 30, 2022, unless they offer their own qualified retirement plan. The registration deadline for employers with 1-4 employees is December 31, 2025. The chart below illustrates a brief summary of the program.


Feature State IRA Plan Employer Sponsored 401k
Plan Type Payroll Deduction Roth IRA Pre-tax, Roth AND Employer Contributions
Contribution Limits Limited to $7,000 (2024) $22,000 (plus more if over age 50)
Compliance $250 penalty per employee if non-compliant after 90 days’ notice,
additional $500 per employee if remains non-compliant
Compliant with state program
Eligibility 18 years old and status as an employee under California law Employer controls eligibility requirements
Plan Costs $18.00 annual fee and 0.325-0.49% asset based fee paid from employee’s account Dependent on type of plan design chosen.
Tax Deductible NO Employer contributions are tax deductible
Tax Credit Available NO Plan costs qualify for available tax credits
Default Contribution 5% of pay with auto escalation unless opt into a lesser amount Employee choice
Auto Escalation Feature Yes, 1% annually up to 8%, but can opt out at any time NO
Minimum Employees to Participate 1  Any Number
Investments Money Market, Target Date or may select from others   More than 25 funds in a variety of Morningstar categories

More Articles