California adopts emergency rule for CalSavers program

California has published an emergency rule that makes changes to regulations governing the state-run retirement plan known as CalSavers.

Background:

CalSavers is a state-based payroll withholding savings program using Roth (post-tax) individual retirement accounts. All employers with five or more employees must either register with CalSavers or offer a qualifying employer-sponsored retirement plan.

Registration deadline:

The registration deadline for employers that don't offer a qualifying employer-sponsored retirement plan is as follows:

CalSavers account:

These employers must setup an account with CalSavers, upload payroll files to add employees to the account, and deduct and remit employee contributions.

Employee opt-outs:

Employees will be automatically enrolled in the program unless they opt out. Employees can opt out by making a notation on an opt-out form or by contacting the program by telephone. An employee who elects to opt out of the program and subsequently wants to participate may enroll back into the program at any time.

Emergency Rule:

The emergency rule removes a feature under which eligible employees who previously opted out are subjected again to automatic enrollment.

The emergency rule also amends the requirements regarding the type of information employers must provide when registering for and adding employees to the program.

Employer Information:

To register, employers must provide the following information:

• Name, legal name, and "doing business as" name, if applicable;
• Federal Employer Identification Number and California Employer Payroll Tax Account Number;
• Mailing address;
• Physical address; and
• Name, title, phone number, and email address of an individual designated by the employer as the primary contact for the program.

Employee Information:

Within 30 days of registration, participating employers must provide the following information to the program for each eligible employee:

• Full legal name;
• Social Security Number or Individual Taxpayer Identification Number;
• Date of birth;
• Physical address;
• Phone number, if available; and
• Email address, if available.

Compliance Recommendations:

California employers that don't offer a qualifying employer-sponsored retirement plan should ensure that they meet the applicable deadline and other requirements for CalSavers. Please contact your dedicated service professional with any questions.