CalSavers Will Leave No Worker Behind to Retire into Poverty

By: State Treasurer John Chiang

I spent the last week of November traveling the state — hosting events in Los Angeles, San Diego, Fresno, Sacramento, and San Francisco — to promote the launch of a profoundly new and important program that will help millions of California’s private-sector workers finally build the means to retire with financial security.

Small business employees and our state’s millions of self-employed and gig economy workers will soon have a clear path to saving for a secure retirement because CalSavers will help facilitate the most sweeping and ambitious expansion of our retirement savings system since the creation of Social Security over 80 years ago.

California is a state that is admired around the world. We’re known for our innovation, and the strong economy we’ve built as a result of it. Our businesses and workers have grown California’s economy to the fifth largest in the world!

Yet, still today, there are an estimated 7.5 million workers in California without access to a retirement savings program through their workplace. Without a retirement savings vehicle in place, many of these workers make the same critical mistake, year-after-year, by assuming that their Social Security benefits will manage to sustain them in retirement.

It is also a common myth that you will spend significantly less in your retirement years than you did during your working years. But, in reality, not only do health care costs for retirees typically increase, but those who also own homes know maintenance costs have a sneaky way of increasing as well.

These faulty assumptions have put nearly half of California’s middle-income workers at risk of retiring into economic hardship.

That’s why we have, as one state, declared we are leaving no worker behind to languish in poverty through their golden years.

Workers who previously had no access to an automatic savings program suddenly will gain access to a completely voluntary, simple, low-cost retirement savings vehicle, with professionally managed investments, overseen by a public and transparent board of directors. Best of all, a worker’s savings account follows them as they move from job-to-job or from city-to-city.

But here is the bottomline: workers with access to a workplace retirement program are 15 times more likely to save for retirement, and even modest savings faithfully maintained over a career can make a difference.

While CalSavers was created with these workers in mind, the program is also a great boon to California’s small business owners. By facilitating a retirement savings program for their employees, these smaller business owners will be on equal footing with their larger competitors.

If you’re an employer with at least five employees, and you have perhaps faced the massive hassle of planning and administering a retirement savings program, CalSavers is the answer you’ve been seeking. There are no administrative headaches, nor is there any cost. All you will have to do is to register and facilitate payroll deductions.

We are now registering companies in the pilot program, after which employees at these businesses are automatically enrolled in CalSavers. And starting July 1, 2019, all employers that don’t already sponsor a retiremnet plan can register for CalSavers so their employees can start saving immediately. And self-employed and other individuals can join anytime starting July 1.

By July 2022, all employers with at least five employees will be required to register for CalSavers, but companies do not have to wait to sign up. They can come on board right now!

Once an employer registers, employees will be automatically enrolled in the program, but can always choose to opt out. Employees can choose their own contribution rate, with deductions made automatically from their paychecks.

Consider this, even modest savings faithfully maintained over a career can make a difference when it comes to retirement. In fact, a typical 25-year-old California worker who participates in CalSavers can expect to save as much as $350,000 by the time they retire at age 65 — two-thirds of which would come from earnings on the original investments made by the saver.

As the state’s banker, I recognize the fiscal value of ensuring all Californians have access to a workplace retirement savings program. CalSavers, with its simplicity and low-cost, is that program.

So, if you’re a business owner, why wait? Sign up today by visiting and registering for our pilot. And, employees, you can visit our site to take our retirement calculator for a test drive, and see for yourselves what a difference saving for the future can make.

Once you see the results, I’m sure you’ll be asking your boss to join the pilot. And why not? The sooner you open your own CalSavers account, the sooner you begin investing in your future.

CalSavers is now open for business, which is why I am inviting California’s eligible employers — all 200,000 of you — to visit to apply for the pilot today!

With your support, we will ensure no worker in California is left behind to retire into poverty.

About CalSavers

Business owners can get more information and apply for the CalSavers pilot by visiting . Follow CalSavers on Twitter at @CalSavers.

The following article is based on remarks delivered by California State Treasurer John Chiang. To learn more about CalSavers click here.

Written by

Fiona Ma, CPA serves as California’s 34th State Treasurer

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