Many California small and medium-sized businesses need to comply with the California Secure Choice Retirement Savings Trust Act
If you still don’t know how to comply with California’s retirement program mandate, don’t panic! Finhabits has put together a simple educational guide to help you better understand what the mandate is and which businesses need to comply with it. Let’s get started!
Finhabits explains: What Is the California Retirement Program Mandate?
The California Secure Choice Retirement Savings Trust Act requires business owners with 5 or more employees on their payroll to offer a retirement savings program for their employees. The deadline for choosing either a qualified private plan or the state-sponsored option and register your business is June 30, 2022.
Finhabits explains: Which Small Businesses Qualify for the California Retirement Program Mandate?
Understanding the mandate is key in order to learn if your business qualifies. This California mandate applies to businesses that do not currently offer a savings retirement program to their employees. These businesses must have five or more employees who are at least 18 years old and who report income with a W-2 form. This includes interns, part-time employees, and full-time employees. The deadline to comply with this law is June 30, 2022.
What are my options for complying with the California retirement program mandate?
Businesses that need to comply with the California retirement savings mandate have options. One option is to select a private plan like the Finhabits 401k plans. Another is to go with the state-sponsored IRA option.
When selecting a Finhabits 401k plan, eligible businesses could receive up to $5,500 in fiscal credits for the first three years of providing the plan. These SECURE Act credits aim at helping businesses cover these initial costs. Eligible business owners may receive their credits at the end of the fiscal year. Please check with your tax advisor to determine what tax credits and tax deductions may be available for your business. Finhabits does not provide tax, legal, or accounting advice.
Please also keep in mind that state law requires businesses to provide a retirement program with payroll deductions. This means that the program you choose must allow your employees to contribute to the retirement program directly from their paychecks.
Do I have to register with the government program?
Offering your employees the state-sponsored program, CalSavers, is not mandatory. Businesses have the alternative to select a private retirement plan like the Finhabits 401k plans or a similar plan that qualifies.
However, employers who qualify to meet this mandate – and decide to offer a private retirement plan – must inform the state about their choice and report their exemption through the website www.calsavers.com before June 30, 2022.
How can a Finhabits 401k plan help you?
Finhabits has over 600,000 members across the U.S. and Puerto Rico. As the first financial wellness platform in both English and Spanish, Finhabits offers fiduciary advice and educational content, making it easy to get into the habit of investing for the future.
The Finhabits 401k plans are an easy retirement savings alternative for complying with the California mandate. Our plans are accessible for any business, regardless of size. To learn more about the Finhabits 401k plans, please visit Finhabits.com/401k or call 650-265-4010.
How can a Finhabits 401k plan help your employees?
Finhabits helps your employees learn smart financial habits as they save for retirement. Our app includes educational tools such as videos and articles that are presented in both English and Spanish.
Additionally, employees who do not have a Social Security number but do have an ITIN (Individual Taxpayer Identification Number) can also participate in a Finhabits retirement program.
Please note that employees also have the opportunity to opt out of your retirement program.
To learn more about the Finhabits 401k plans, please visit Finhabits.com/401k or call 650-265-4010. The Finhabits 401k Team offers support in both English and Spanish.
Finhabits explains: California Retirement Program Mandate: More Benefits for Latino Small Businesses
This material has been provided for informational purposes only, and is not intended to provide investment, legal or tax advice. Check with your tax advisor to determine what tax credits and tax deductions may be available for your business. Finhabits does not provide tax, legal or accounting advice.Investment advisory services offered through Finhabits Advisors LLC, an SEC registered investment adviser. Registration does not imply a certain level of skill or training. Past performance is no guarantee of future returns. There are risks involved with investing. Insurance services offered through Finhabits Insurance Services LLC, a licensed producer in certain states. Finhabits Advisors LLC is not a fiduciary to insurance products or services.