- California officially launched the CalSavers retirement program on July 1; the program provides employees access to retirement savings accounts without the administrative complexity, fees, or fiduciary liability of existing employer options, according to the California State Treasurer website.
- Any employer with at least five employees that doesn’t already offer a workplace retirement savings vehicle will be required to either begin offering one via the private market, or to provide its employees access to CalSavers.
- CalSavers will be operated solely through administrative fees. Eligible employers can register for CalSavers at any time and are required to comply by the following dates: June 30, 2020 for employers with over 100 employees; June 30, 2021 for employers with over 50 employees; and June 30, 2022 for employers with five or more employees.
Employees' financial well-being in retirement is a concern for employers; the average U.S. worker has $0 saved for retirement, according to a report from the National Institute on Retirement Security. Among those who do have retirement savings, the average amount saved is just $40,000 — and 70% of workers between the ages of 55-64 have a retirement account no greater than their annual income.
Many workers, in fact, are addressing retirement-related challenges by pushing back retirement. One-fifth of seniors are still working in 25 cities identified by Provision Living, a company that operates senior living centers.
Long-term financial planning is a problem that's on employees' minds, and they are looking to their employers to help them solve it. A third of workers report being worried about finances at work, according to a recent study, with debt leading the list of concerns. Many employees (75%) wanted their employers to help them calculate the amount needed for a secure retirement and help them plan for monthly spending (72%) and health care expenses (72%) in retirement. Comprehensive financial planning was on the wishlist for 68% of employees surveyed.
Because so many workers are worried about financial struggles in retirement, and also routinely underestimate how much money they will need after they stop working, talent professionals are starting to tackle the issue head-on. Workers who are not distracted by looming financial concerns are more productive and focused, and employers that offer the perk of financial resources and education could have a leg up on attracting and retaining talent in a tight job market.