CalSavers (for California residents)

A few years ago California passed a law that all businesses¹ with 5 or more employees must offer a retirement program or automatically enroll their employees in the state run retirement program called CalSavers. In 2026, the law is changing to all businesses that have 1 or more employees must comply with the CalSavers requirements. Businesses that don’t comply may be fined by the state.

The spirit of the program is great - a large percentage of small business owners and employees aren’t saving for retirement and the state is trying to solve that problem. But as with any large initiative, the program has presented some challenges for its users. One of the challenges has been that the process to set up and administer CalSavers can be a burden for business owners and the accountants that manage payroll. Depending on your payroll provider, the payroll manager may have to login to CalSavers every pay period to manually enter the employee’s contribution. 

Another challenge is that, based on feedback from some employers we’ve spoken to, not all employees are comfortable with the idea of having the state manage their retirement savings. We won’t speculate on why. A related point is that if an employee decides to move to another state they have to deal with the hassle of having their retirement account transferred from CalSavers to a new brokerage firm.

Luckily, CalSavers recognizes that some employers may want to use other providers and allows business owners to file for an exemption if they offer an employer-sponsored retirement plan. One of the types of plans that qualifies for the exemption is “Payroll deduction IRAs with automatic enrollment”, which is exactly what Crecer offers. In other words, you can use Crecer instead of CalSavers for your business.

The Crecer Employer Administrative platform allows business owners to enroll their employees in a Traditional or Roth IRA account and set up payroll deductions so the employee’s contribution (which they can choose) is automatically deposited into their Crecer retirement account every pay period. Some accountants and employers have shared that they find Crecer’s platform easier to use than CalSavers. It takes just a few minutes to set up each employee’s account and once the set up is complete the contributions are processed automatically each pay period - there’s no need to login manually to process the contribution. Most importantly, there is no fee charged to the business for offering Crecer IRAs to its employees, which is not true for 401(k) plans.

Employees also benefit from the fact that Crecer’s retirement plans are aligned with the employee’s investment profile and provide more flexible account ownership. During the account setup we ask the employee questions about their investment risk tolerance and objectives in order to create an investment plan that matches their profile. Additionally, if the employee decides to move to another state they don’t have to worry about transferring their account to another provider and can easily ask their new employer to set up a direct deposit with their existing Crecer account.

Crecer shares the same mission as CalSavers in trying to help small business owners and employees save for retirement. We applaud CalSavers for the program they’ve designed and are happy we can offer an alternative that meets CalSavers’ requirements.