United Ways across the state are helping Californians become more financially stable now and into the future. Through our financial literacy work, programs like CalSavers are helping to level the playing field for employers and employees alike. CalSavers allows businesses to provide workers with a retirement savings option all at no cost, no fiduciary liability and low administrative complexity for the business.   

Through the CalSavers Program, the economic hardship faced by many in their retirement years may be reduced and CalSavers may ultimately lessen the long-term financial liability of the state. By enabling workers to save for retirement, they may be less reliant on taxpayer-funded public services when they reach retirement age. CalSavers comes with no cost or liability to taxpayers and it is completely self-sustaining through low-cost fees paid by the employee. With CalSavers, Californians can retire with savings in their pockets, security in their future and peace of mind for tomorrow. 

What is CalSavers?

It is estimated that there are 7.5 million Californians without access to a workplace retirement plan.  

• Two-thirds of them work for companies with less than 100 employees;
• Two-thirds are workers of color;
• More than half are women

In 2016, the State of California enacted legislation to address this problem. CalSavers is a voluntary workplace retirement program designed to give Californians a chance to save for retirement. CalSavers requires employers with at least 5 employees to offer a qualified workplace retirement plan or facilitate access to the CalSavers Program.  

How CalSavers Helps Employers

CalSavers is an easy to implement, low-cost, effective option for employers who want to provide their employees with the opportunity to save for retirement. CalSavers: 

• Is No Cost: Retirement benefits can cost an employer thousands of dollars a year to establish and maintain. CalSavers requires very little effort to register and there are no fees for the employer.  

• Has Minimal Administrative Complexity: CalSavers is easy to implement and the employer is not subject to audits. The CalSavers Program assumes responsibility. 

• Has No Fiduciary Liability for Employer: Participation in the CalSavers Program means no liability for the employer because the State of California is the fiduciary. The employer does not contribute to the employee account, is not liable for investment decisions and is not liable for an employee’s decision to participate in or opt-out of CalSavers. The company is not liable with regard to program design, investment returns or benefits paid to employees. 

What CalSavers does for Workers

CalSavers is a simple, effective, portable retirement program for employees. CalSavers is:

• Easy: It allows for automatic enrollment at work and automatic deduction of contributions. Workers with a payroll deduction savings option are 15 times more likely to be on a path to retirement security and 20 times more likely to save when they are automatically enrolled in a savings vehicle.
• Voluntary: Savers may opt-out at any time and can opt back in at any time.
• Portable: It stays with the employee, travels from job to job and is held by the CalSavers Program, not the employer. If an employee changes jobs, the account moves with them. They can opt to continue to contribute either through their employer if eligible or individually, by connecting it to their bank account. 

The Potential of CalSavers

If a low wage worker starts at age 25 earning $30,000 a year and participates fully following all defaults and remains low-wage, with an average 5% return rate, the person will earn approximately $350,000 over a 40-year period. One-third of the money is the individual’s contributions, the other two-thirds is interest.  

How United Way Supports CalSavers

United Ways advance opportunities for low- and moderate-income people to lead successful lives by focusing on three priority areas: Health, Education and Financial Stability by facilitating work on programs such as CalSavers. We were instrumental in advocating for the legislation, in convening and facilitating over 100 stakeholders who helped form what CalSavers is today, and by assisting our regional workgroup partners in securing funders. 

Today, we continue to lead the CalSavers charge. We do this by: 

• Providing backbone support to other local United Ways as they work to promote CalSavers throughout their region in an effort to reach businesses and workers who may benefit from the CalSavers Program. 

• Working closely with Small Business Majority and other statewide partners to educate constituents across the state 

• Partnering with the CalSavers Team to provide viable outreach and education opportunities to those most in need.

• Collaborating with Local United Ways across the state to form regional workgroups whose purpose is to educate their communities. 

Take Action Today! 

Employers with at least 5 employees who do not offer a workplace retirement plan can register beginning July 1, 2019.  

HOWEVER, you don’t have to wait. You can enroll beginning July 1, 2019. Register today!