July 2020


A state-launched program to give California workers and employees the opportunity to save for their retirement

In an effort to get Californians to save more for retirement, the State has launched a program called
CalSavers. State law now requires that California employers who don’t already offer an employer-sponsored retirement plan and who have five or more employees to either sponsor a retirement plan or participate in CalSavers.

This new program mirrors the efforts of 8 other states and transfers more responsibility on employers to help employees work toward a greater retirement savings. The
program is in effect, but the eligibility deadlines for companies to register comes in stages based on employer size:

July 1, 2020        Organizations with 100 employees or more

July 1, 2021        Organizations 50–99 employees

July 1, 2022        Organizations 5–49 employees

All eligible employers are encouraged to join at any time prior to their registration deadline or otherwise register their exemption.

  • The CalSavers program at a high-level works as follows:
  • Employers must offer a Roth IRA retirement vehicle through CalSavers if they don’t already sponsor a qualified retirement plan
  • Enrollment in the plan is automatic for employees unless they formally opt out
  • The default savings rate is 5% of gross pay, and employees may change their rate at any time (any may contribute only up to the IRS Roth IRA statutory
  • The employer may not contribute to the employee fund
  • There are no employer fees and no fiduciary responsibility
  • Employee fees charged by the investment entity are permitted, but may not exceed 1% per year
  • The State of California will run the plan if the employer doesn’t
  • Participating employers must add employees and submit participating employees’ contribution via payroll deduction
  • Employees can opt out and back in at any time.
  • Employees’ accounts are portable and will stay with them even if they leave your employment.

That employees should save more money for their retirement is a given. What is not is whether a Roth IRA with a high minimum requirement, using electronic education and with state oversight, without a current tax deduction, is not.

We at Arrow can deploy a wealth of Strategic Partners and Advisors to provide our clients a comprehensive financial wellness series. This series may be customized, featuring personal investment education and planning, advice on administration and investing, benchmarking studies and an analysis on an array of retirement vehicles. Please contact [email protected]
to learn more.

More information about the CalSavers program can be found on its official website here:

How Technology Can Make or Break
Client Relationship

Employee Benefit News exclusive Video interview with Andrew McNeil and Rosario Avila

Benefit Adviser’s 2019 Advisers of the Year

“Technology is the most vital issue for benefits brokers today…a lot of people that we see are not embracing technology when clients want it.” In this Lightning Round video, McNeil and Avila also discuss bilingual employee engagement and how they get over differences as business partners.

HERE to watch the video…

Arrow Benefits is Awarded the North Bay Business Journal Philanthrophy Award for 2020

We are humbled to be a recipient of the North Bay Business Journal Community Philanthropy Award for 2020. We will strive and continue to do our part in helping
build a better community for our future generations to come.