Glossary
CalSavers
CalSavers is California's state-run retirement savings program, which employers without their own retirement plan must register for so their employees are automatically enrolled in Roth IRAs funded by payroll deduction.
The mandate now reaches employers with even one eligible employee. Employers who neither offer a plan nor register face state penalties per eligible employee. Employees are auto-enrolled at a default contribution rate into a Roth IRA (with an opt-out), which means CalSavers accounts carry Roth IRA income and contribution limits.
Why it matters in practice
For employers, CalSavers is one way to satisfy the mandate — but not the only one; a 401(k) or similar plan also satisfies it, with higher limits, employer matching, and potential tax credits. For employees, the auto-enrollment default is a start, though the default rate alone is rarely enough to fund a retirement. See our CalSavers hub for employers for deadlines, penalties, and alternatives.
Related terms: Roth IRA · 401(k) · Plan Sponsor · SIMPLE IRA · SEP IRA