Waiting for Employee Enrollment
After employee information is added, your employees will be sent an invitation to join the program and set up their account-or opt out if they prefer not to participate. Each employee will have 30 days to customize their account or opt out before payroll contributions are expected to begin. If your employee does not take action within 30 days, they will be automatically enrolled in CalSavers with the standard contribution rate and investment funds.
This 30-day period is important as it gives you an opportunity to complete a few tasks in preparation for submitting employee contributions.
What can you do while you wait for employees to take action?
While there are no required actions for you during this period, we recommend you take a few proactive steps to be ready for when it’s time to submit contributions.
- Send a communication to your employees to alert them that your company is participating in CalSavers. This is optional but most employers say that it helps employees understand and prepare for CalSavers.
- If your employee mentions to you that they did not receive a Welcome packet within by 7 days of you adding their information, open the employee’s profile and resend the information.
- Get a head start on your initial saver contribution and add the CalSavers deduction within your bookkeeping or payroll software/file. The new payroll deduction should be built with the following characteristics:
- Roth IRA (post-tax)
- 5% default deferral rate (no dollar amounts). (Note: Based on your employees’ decision, you may need to change this percentage after the 30-day opt out period is over. See set up Deductions.
- Contributions are calculated from the gross income with the amount deducted after taxes
- Not reportable on W2's
- No employer matching
- If you use a payroll solution such as a payroll company or software to manage employee payroll, now is a good time to make this connection.
Frequently asked questions
State law establishes CalSavers with what is commonly known as “automatic enrollment”. With automatic enrollment, eligible employees who do not choose to opt out will be enrolled automatically in the program. The feature has become common to retirement plans, with over half using automatic enrollment.
Employees are enrolled with limited employer involvement. When an employer registers for CalSavers, the employer provides basic employee roster information to CalSavers. From beginning to end, this process generally takes about 30 minutes; many employers complete it in under 15 minutes. Employers are encouraged to complete this step when they register, but if they need more time, can do it within 30 days of their registration date.
CalSavers uses this information to contact employees directly to make them aware of the Program and provide them information on how the program works, how to set up their account, and how to opt out if they wish. If an eligible employee takes no action within 30 days, they will be automatically enrolled in the program under the default saving settings. If they wish to make changes to their account setting or opt out of participating in the program, they will be directed to contact CalSavers.
CalSavers has informational flyers, program materials, and sample emails employers may send to their staff to inform them about the program. Use of these materials is optional for employers, however state law requires employers to remain neutral about the program when describing it to their employees. After registration and enrollment, employers are responsible to deduct and remit each saver’s contributions each pay period. Employers are also responsible to add new eligible employees to the program within 30 days of their date of hire or date of eligibility.
After registration and enrollment, employers are responsible to deduct and remit each saver’s contributions each pay period. Employers are also responsible to add new eligible employees to the program within 30 days of their date of hire or date of eligibility.
Employers must remain neutral about their employees’ participation in CalSavers. You will be provided an email template at the time of your registration that you may share with your employees to inform them that CalSavers will reach out to them. Your employees will be contacted directly by the Program with all necessary information. If they have any questions, or wish to make any changes to their account, they should contact the Program directly (Client Services) at www.calsavers.com, at 855-650-6918 or email@example.com