Mar 09, 2023How a Flexible Spending Account (FSA) Works
An FSA is a benefit that allows pre-taxed funds to be used for planned medical expenses. Learn how a Flexible Spending Account (FSA) works.
The California Secure Choice Retirement Savings Investment Program is now called the Cal Savers Retirement Savings Program (Cal Savers). This program provides workers whose employers don’t already offer a retirement plan a way to save for their retirement.
This program is available for employers with five or more employees and to take advantage of it, eligible employers must register with Cal Savers by June 30, 2022 or get connected with agencies like ourselves to get a simple retirement plan up and running by that same deadline.
Cal Savers is a retirement savings program for private-sector workers whose employers don’t offer a retirement program. Once the program goes into effect, employees who haven’t opted out are automatically enrolled in Cal Savers and will have a percentage of their pay removed by Cal Savers to save for their retirement. Although eligible employees will be automatically enrolled (see How Do Employees Participate? below), participation in the Cal Savers program is voluntary and employees can opt out at any time. The program will be administered by a private-sector financial services firm (the program administrator) and overseen by the California Secure Choice Retirement Savings Investment Board (the Cal Savers board), a public board of directors chaired by the State Treasurer.
The law applies to private-sector employers that:
Employers that meet these two requirements are considered eligible employers. An employer that offers a tax-qualified retirement plan is not eligible and its employees can’t participate in the Cal Savers program.
The Cal Savers Retirement Plan opened its program for employers to register on July 1, 2019 — and depending on the size of the employer, enrollment deadlines are:
Employers can register via the Cal Savers website, by phone, by overnight mail or by regular mail.
Under the Cal Savers Retirement Plan program, employers must:
In addition, if a new employee is hired after registration, that individual’s information must be submitted within 30 days of the date of hire.
Employers don’t pay any fees for their employees’ participation in the Cal Savers program and are not required to contribute to the Cal Savers program aside from remitting the prescribed portion of their employees’ salaries.
Employers are expressly prohibited from encouraging or discouraging employees from participating in the Cal Savers program, or from providing any advice about any decisions related to investment and contribution relating to the program.
The Cal Savers program is set up for automatic enrollment. Once an employer reports eligible employee information to the program administrator, the administrator will send information to the employee about Cal Savers. If the employee doesn’t opt out of Cal Savers within 30 days of receiving that information, the employee will be automatically enrolled. Employees can opt out on the Cal Savers program website, by phone, by overnight mail or by regular mail. Employees who opt out can re-enroll at a later date.
By default, enrolled employees will see the default contribution amount (5 percent) be deducted from their pay, and they’ll see that percentage automatically increase by 1 percent annually until it reaches 8 percent, at which point it will cease increasing. However, employees can also elect alternative contribution amounts ranging from 0 to 100 percent of their compensation. Detailed information about the contribution amounts, automatic increases and investment options can be found in the Cal Savers Program Disclosure Booklet.
Please note this information is provided for educational purposes only. It is not intended to provide legal or financial advice. For more information or guidance through the Cal Savers process, you will need to contact Cal Savers directly.
For options outside of Cal Savers, you may contact Jon Pollock with M&G at firstname.lastname@example.org.