In light of the state’s “Stay at Home” executive order and state of emergency, California is offering more time to certain employers facing a summer deadline for registering in the state’s auto-IRA program, called CalSavers, said the program’s director. Employers with more than 100 employees originally faced a June 30, 2020, deadline to register with CalSavers. That deadline is now flexible because of the novel coronavirus pandemic.
While noting that it hopes employers will continue to enroll employees, the state is offering “more time [as businesses] move into recovery,” said Katie Selenski, executive director of the CalSavers board. “In light of the unprecedented challenges, we are committed to offering extra support and flexibility to employers.”
With employers wondering about the survival of their businesses and millions filing unemployment claims, Selenski and the CalSavers Program Staff is offering “extra support and flexibility,” according to materials provided by the program. Employers who are uncertain about their ability to meet the deadline must contact an “Employer Assistance” hotline staffed by CalSavers representatives.
California has been on the road to providing a state-mandated auto-IRA for years, having selected Ascensus to lead the program in 2018. In November 2018 California began piloting the program, which will eventually see every employer in the state with five or more employees registering with the program—or offering its own program.
With a goal to have all eligible employers registered by 2022, advisors have an opportunity to present a private option to employers, according to some industry observers. “This could be a lead-generating opportunity for advisors to have a conversation with business owners to offer up their services,” said Andrew Remo, director of legislative affairs at the American Retirement Association, in an interview last year.
CalSavers’ flexible enrollment policy only applies to employers facing the June 30 deadline. The state didn’t name a specific date for the deadline extension, and employers who believe they need more time are urged to call the program.
CalSavers survived a lawsuit by the Howard Jarvis Taxpayers Association that sought to block the auto-IRA program on the basis that the federal Employee Retirement Income Security Act (ERISA) preempts the program. The suit was dismissed for a second time by a U.S. district judge last month.