326 | 2024 Cal-Peculiarities ©2024 Seyfarth Shaw LLP www.seyfarth.com 8.5.2 Notice of available medical benefits California employers must explain to employees, in at least outline form, the benefits provided under employersponsored health coverage, including the identity of the provider organization(s), and must give terminated employees notification of all continuation, disability extension, and conversion options under any employersponsored coverage for which the employee may remain eligible after employment terminates.52 8.5.3 Disclosures for deferred compensation plans California employers who offer employer-managed deferred compensation plans must provide each employee, before the employee’s enrollment in the plan, written notice of the reasonably foreseeable financial risks concerning participation in the plan, together with historical information to date as to the performance of plan investments and documents showing the employers’ financial condition through at least the immediately preceding year. Employers that directly manage investments of such a plan must also provide quarterly reports for each plan investment fund and the actual performance of the employee’s investment.53 8.6 CalSavers Retirement Savings Program CalSavers is a state-run program governed by the California Code of Regulations and overseen by the California Secure Choice Retirement Savings Investment Board.54 When CalSavers was enacted, participation was mandatory for an “eligible employer,” which was defined as any private California employer with five or more employees at least one of whom is age 18 or older, that does not sponsor a tax-qualified retirement plan.55 However, on August 26, 2022, SB 1126 amended CalSavers to expand the definition of “eligible employer” to include, with certain exceptions, a person or entity engaged in a business, industry, profession, trade, or other enterprise in the state, whether for profit or not for profit, that has at least one eligible employee and that satisfies the requirements to establish or participate in a “payroll deposit retirement savings arrangement.”56,57 As a result, any private California employer with four or fewer eligible employees are now also subject to CalSavers. Such employers may voluntarily register with CalSavers beginning January 1, 2023. The amended mandatory registration deadlines are as follows: Employers with more than 100 employees had to register by September 30, 2020. Employers with more than 50 employees must register by June 30, 2021. Employers with five or more employees must register by June 30, 2022. Employers with four or fewer employees must register by December 31, 2024.58 Sole proprietorships, self-employed individuals, and other business entities that do not employ any individuals other than the owners of the business are exempt from CalSavers.59 Under CalSavers, employees make after-tax contributions to Roth IRAs that are created on their behalf. CalSavers also has an automatic enrollment feature, meaning that unless an employee opts out (or elects a different contribution rate) within 30 days of receiving enrollment materials, the employee is automatically enrolled at a contribution rate equal to 5% of compensation. Thereafter, a 1% automatic escalation applies each January 1, up to maximum of 8%.60
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