If you sponsor a qualified retirement plan — or qualify on another ground, such as having no employees other than the owner — you certify your exemption through the CalSavers employer portal using your FEIN or TIN, your EDD payroll tax ID number, and the CalSavers access code from the notice mailed to you. Sponsoring a plan does not automatically remove you from the list: until you certify, the state's records still show you as non-compliant.
The mistake that earns compliant employers a penalty notice
The most common exemption problem we see is not eligibility — it is silence. An employer sets up a 401(k), assumes the state can see it, and ignores the CalSavers mail. But CalSavers builds its list from EDD payroll data, which says nothing about whether you sponsor a plan. Until you certify, you look identical to an employer doing nothing — and the penalty machinery treats you accordingly.
What you need before you start
1. FEIN or TIN
Your federal employer identification number — the one on your payroll tax filings.
2. EDD payroll tax ID
Your California employer payroll tax account number with the Employment Development Department.
3. CalSavers access code
Mailed to you in the notice from CalSavers. Lost it? You can request a new one from CalSavers directly.
With those three, you submit the exemption through the employer portal at employer.calsavers.com. If your plan and paperwork are in order it is a same-day task.
Who qualifies for an exemption
| Ground | Notes |
|---|---|
| You sponsor a qualified retirement plan | 401(a), 401(k) — including multiple-employer and pooled employer plans — 403(a), 403(b), SEP (408(k)), SIMPLE (408(p)), or a payroll-deduction IRA with automatic enrollment |
| No employees other than the owner(s) | Owner-only businesses are exempt |
| No employees other than the owner's spouse | Also exempt |
| Only independent contractors | No W-2 employees means no mandate |
| Government, religious, or tribal organization | Exempt by entity type |
| Business closed or sold | Requires a signed letter on company letterhead to CalSavers with a final tax return marked "Final," a dissolution form, or a DE1 indicating closure |
After you certify
- Exempt employers are prohibited from participating in CalSavers — you cannot run both the state program and your own plan. It is one path or the other.
- If your situation changes, tell them. A participating employer that ceases to be an eligible employer must notify the administrator within 30 days. The prudent mirror of that rule: if you terminate your plan or your workforce changes, update your status promptly rather than waiting for a notice.
- Expect annual mandate-status mail. CalSavers notifies employers about mandate status each year, so a letter after you have certified is not automatically a problem — but do not ignore it either.
- Re-certification: the CalSavers regulations (California Code of Regulations, title 10, section 10000 and following) set no fixed renewal cycle for an exemption. If you end your plan or your situation changes, update your status with CalSavers promptly, and answer any notice they send rather than assuming it is an error.
Common questions
I have a 401(k). Am I automatically exempt?
You qualify for the exemption, but it is not automatic — you must certify it with your FEIN, EDD payroll number and access code. Until then the state's records show you as non-compliant.
I lost my access code. Can I still certify?
Yes — request a replacement from CalSavers at (855) 650-6916 or through the employer site. Do not let a lost code run you past a deadline; the request is routine.
I'm a sole proprietor with no staff. Do I need to do anything?
You are exempt as an owner-only business. Under the regulations, exempt employers may — but need not — inform CalSavers of their exemption. CalSavers' employer help center asks exempt employers to report their exemption, and doing so is quick. If you have received mailed notices, certifying stops the letters and creates a record.
Does a SIMPLE IRA or SEP count, or only a 401(k)?
Both count, along with 401(a), 403(a), 403(b) plans, pooled employer plans, and auto-enrollment payroll-deduction IRAs. Which plan type fits is a separate question →
I certified, but I just got a penalty notice anyway. What now?
Move quickly — you can request an appeal hearing with the Franchise Tax Board within 90 days of the first penalty notice, and you cannot appeal after FTB issues the final notice, and a documented exemption is exactly what an appeal is for. The step-by-step walkthrough →
Setting up a plan and want the exemption handled right?
We help employers choose the plan, stand it up, and certify the exemption so the state's records match reality.