In today’s economic environment, planning for retirement is more important—and more challenging—than ever before. For the millions of California workers whose employers don’t offer a retirement plan, the path to financial security in later life has long felt out of reach.

That’s why the State of California created CalSavers, a public, state-administered retirement savings program designed to make saving easy, automatic, and accessible—especially for those who would otherwise have no workplace option.

As Executive Director of CalSavers, I’m proud to share some exciting updates about the program’s continued rollout, and what it means for small business owners, employees, and the future of retirement savings in our state.

What Is CalSavers?

CalSavers is a retirement savings program for private-sector workers who lack access to an employer-sponsored retirement plan. It enables employees to automatically contribute a portion of their paycheck to a personal Roth IRA through simple payroll deductions.

Participation is easy and flexible. Workers are automatically enrolled (with the ability to opt out), and contributions are made directly from their paychecks, helping them build long-term savings without the burden of manual budgeting. This approach is proven: people are up to 20 times more likely to save for retirement when contributions happen automatically.

How the Program Works

CalSavers is built on five key pillars that make it effective for employees and feasible for employers:

1. Payroll Deductions
   The most effective way to save is to deduct savings before they ever hit your checking account. CalSavers enables automatic paycheck contributions into a personal retirement account.

2. Automatic Enrollment with Opt-Out
   Employees who do not take any action are automatically enrolled. This behavioral nudge significantly increases participation rates, especially among younger and lower-income workers.

3. Auto-Escalation of Contributions
   The default contribution rate begins at 5% and increases by 1% annually, up to 8%. Participants can adjust their rate at any time.

4. Minimal Employer Responsibility
   Employers are not required to match contributions, assume fiduciary responsibility, or pay program fees. The online portal makes registration, roster management, and payroll facilitation simple and efficient.

5. State Mandate for Employers
   Employers are legally required to register for CalSavers if they do not offer a qualified retirement plan. Noncompliance may result in penalties, though the goal is participation, not punishment.

Wave Four: CalSavers Reaches California’s Smallest Businesses

CalSavers has been rolled out in phases, or “waves,” since its pilot began in 2018. The first three waves covered businesses with 100+, 50+, and then 5+ employees. Now, we’ve entered Wave Four, expanding the program to cover California businesses with 1 to 4 employees.

Key Details:

• Deadline to register and comply: December 31, 2025

• Applies to businesses with at least one employee other than the owner or the owner’s spouse

• Sole proprietors and self-employed individuals may voluntarily participate but are not required

This expansion will bring retirement access to over half a million additional employers across the state, ensuring that even the smallest companies can support their workers’ financial futures.

Simple Employer Responsibilities

Employer duties remain minimal and consistent across all waves:

• Register through the CalSavers portal

• Upload employee roster

• Facilitate payroll deductions

• Maintain and update employee information as needed

There is no cost to the employer, and the portal is designed to be easy to use with existing payroll systems.

Benefits for Employees

CalSavers empowers employees with portable Roth IRAs, so their savings stay with them regardless of job changes. Participants can:

• Choose from a menu of investment options

• Set or change their contribution rates

• Opt out at any time

• Default into a professionally managed, age-appropriate target-date fund if no selections are made

Traditional IRAs are also available, but Roth IRAs remain the most popular option.

New Incentive: $500 for Early Participation

To encourage early adoption in Wave Four, CalSavers is launching its first-ever employer incentive campaign. Participating employers who register and fully comply before November 30, 2025 will be automatically entered into a drawing to win a $500 cash reward.

Eligibility Requirements:

• Must have at least one actively participating employee

• Must complete registration and begin payroll deductions before the deadline

• Must maintain compliance throughout the campaign

A total of 2,000 winners will be selected. While you can only win once, the $500 prize could be especially meaningful for the smallest of micro-businesses.

Moving the Needle for Retirement Security

While some employers may initially view CalSavers as just another mandate, we encourage them to see the broader value. This program is about building financial resilience for millions of Californians—many of whom have never had access to retirement savings before.

By reducing barriers, simplifying employer responsibilities, and automating savings, CalSavers is redefining how we think about retirement in the modern economy. And with a $500 carrot to go along with the regulatory stick, there’s never been a better time to get started.

Learn More

For more information or to register your business, visit the CalSavers official website, follow us on social media, or contact our support team for personalized help.

Together, we’re making retirement savings accessible, automatic, and achievable—one paycheck at a time.