Dear Clients and Friends,
We want to bring to your attention some important updates to the CalSavers Retirement Savings Program that will take effect in 2025. These changes may impact your business if you operate in California and do not already offer a qualified retirement plan to your employees.
Key Changes in 2025:
1. Lowered Employee Threshold
- Starting January 1, 2025, all employers in California with at least one eligible employee (previously five) will be required to either offer a retirement plan or register for CalSavers. The definition of “employee” includes all part-time employees (excluding owners with direct ownership). Spouses without ownership are treated as employees if they receive a W-2 and are reported on the DE 9C.
2. Increased Penalties for Noncompliance
- The Franchise Tax Board will enforce penalties of up to $750 per eligible employee for businesses that fail to comply after receiving a notice.
What This Means for You:
- If you already offer a qualified retirement plan, no action is required—but you may need to certify your exemption.
- If you do not offer a retirement plan, you must register with CalSavers or explore private plan options before the deadline to avoid penalties.
We recommend reviewing your current retirement benefits and determining whether CalSavers or a private retirement plan is the right fit for your business.
If you’d like assistance evaluating your options or ensuring compliance, we’re here to help.
Best regards,
The Vanderbilt Team