California’s retirement savings mandate has been in place since January 2023, but a significant deadline is still ahead. By the end of 2025, every employer with at least one employee must either provide a qualified retirement plan or register for CalSavers, the state-sponsored savings program. Established under the California Secure Choice Retirement Savings Trust Act, the mandate was designed to expand access to retirement savings across the state. While many employers have already registered, the final compliance date—December 31, 2025—will bring the smallest businesses, those with one to four employees, into the system. (California Government Code § 100032)
For employees, the upcoming deadline is encouraging news. Even if you work for a very small business, you’ll soon have access to a payroll-deduction retirement savings account. The convenience of automatic deposits makes it easier to stay on track with savings, and the mandate ensures that more Californians will have the opportunity to build financial security for the future.
Employers don’t have to use CalSavers to meet the requirement, though it remains a simple and effective option. Many businesses—especially those wanting to attract and retain talent—may choose to sponsor their own retirement plan, such as a 401(k) or a pooled employer plan, which can allow for features CalSavers doesn’t provide, like matching contributions and a wider range of investment choices. Whichever direction an employer selects, employees stand to benefit from greater access to retirement savings at work.
Now, there are exemptions for some employers. Sole proprietors with no employees are not required to register, and businesses that already sponsor a qualified retirement plan are also exempt. For all others, the rules apply, and penalties are in place for those who do not comply—potentially up to several hundred dollars per employee. This framework is designed to ensure broad participation while giving employers flexibility in how they choose to meet the mandate.
Proposed Bill for Changes to Public Employee Retirement on Hold
Another development that may be on the horizon in 2026 — specifically for public employees — is AB 1383 (Public Employees’ Retirement Benefits). Originally proposed to take effect January 1, 2026, the bill would have introduced new pension formulas allowing certain public safety employees to retire earlier (at age 55 instead of 57) with higher benefit multipliers. It also included broader provisions for all employees hired under PEPRA, such as raising the pensionable compensation cap and giving employers and unions more flexibility to negotiate how pension costs are shared. The bill did not pass out of the Assembly Appropriations Committee this session and has been designated a two-year bill so it can be brought up in future sessions. While the timeline is delayed, for public employees it remains a change to keep on their radar.
Making the Most of What’s Ahead
It’s encouraging to see momentum building toward improvements that help more people prepare and save for retirement. Whether you’re an employee gaining access to new savings opportunities through work, or an employer deciding between CalSavers and a more comprehensive plan, now is the time to review your strategy. Staying informed and making intentional choices today can help ensure that your financial future remains secure.
If you’d like guidance on your retirement planning tailored to your situation, the team at Aspire Planning Associates is here to help. Contact us today at (925) 938-2023 to schedule your consultation.
