If you were to speak to experts on retirement savings, many would say that America is facing a “retirement crisis.” The United States currently has a retirement gap savings of more than $6 trillion, and 35 percent of U.S. households don’t participate in any retirement savings plan.
In California, even before the pandemic, an estimated 7.5 million people — about half of all employees — lacked access to a workplace retirement program, according to PEW Charitable Trusts. Of those 7.5 million Californians who did not have access to a workplace retirement plan, two-thirds worked for businesses with fewer than 100 employees.
CalSavers, California’s new state-run retirement benefits program, launched in July 2019, strives to change that, with support from Silicon Valley Community Foundation’s financial stability grantmaking strategy. With the implementation of CalSavers, by 2022 all businesses with more than five employees will be required to either facilitate contributions to CalSavers or offer a plan of their choice from the private market.
“CalSavers is the beginning of a new day for the millions of California small businesses and employees struggling to access retirement savings,” says Mark Herbert, California director for Small Business Majority, a nonprofit working to empower entrepreneurs and small businesses through advocacy, education and research. “It will go a long way toward leveling the playing field for the many small firms that lack the resources to enroll their employees in a retirement savings program,” he says. “We are excited to partner with Silicon Valley Community Foundation so we can help educate small-business owners, their employees and others about all the good the program will do for California’s small firms.”