Prepare Your Clients for CalSavers

In 2019, when CalSavers—California’s retirement plan mandate—was first signed into law, financial advisors significantly increased the number of 401(k) plans they sold in the Golden State. However, that mandate only affected a small proportion, less than 2%, of overall businesses in California. That is changing this December, when businesses that employ between 1 and 4 people will also be required to comply with the law. The size of this opportunity for financial advisors is staggering. Here’s what you need to know.

Key Takeaways

• December’s CalSavers deadline affects 1.5 million businesses in California.
• Take advantage of the chance to educate your solopreneur clients about retirement savings.
• Educate your clients about their retirement savings options.
• Help your clients understand that sponsoring a retirement plan is a win for them and their employees.
• Show your employees how an ePlan Services 401(k) compares to CalSavers.
• Stay ahead of the competition by preparing your out-of-state clients as well.

CalSavers presents a massive opportunity for financial advisors

In 2019, when CalSavers was first launched, employers with 100 or more employees were required to enroll.

In the last 6 years, that has changed dramatically. Starting December 31, 2025, businesses with even 1 employee or more are required to enroll in CalSavers or another qualifying retirement plan. If they don’t, they could pay the price of up to $500 per employee.

Nearly 1.5 million enterprises fall into the mandated range, employing between 1 and 4 people. In other words, this December, three quarters of businesses in California will be legally required to establish a retirement plan. The market for businesses impacted by the mandated deadline is huge. How should financial advisors prepare?

Connect with your professional network today

Start with your network of California-based entrepreneurs. By giving your contacts a heads-up and helping them prepare for the new implementation, you can help strengthen your professional bonds and open conversations around the benefits of a retirement option beyond what’s mandated.

Some of your California contacts with small businesses may be unaware of CalSavers. Or they may misinterpret the requirement, thinking it doesn’t apply to their businesses (more on that below). You wouldn’t want your connections to end up like some business owners in Oregon who claim they didn’t find out about Oregon’s retirement savings mandate from the state, but from their payroll provider. Others have said the state didn’t make it clear that the savings program was a requirement, so they initially ignored the notification. Misunderstandings like this can cause delays in plan implementation, which could eventually result in costly fines. (If you have a client who needs a 401(k), fast —reach out to us. Your client’s plan can be set up and funded within 24 hours.)

Your inner circle needs to understand the state’s mandate and what it means in relation to their businesses. More importantly, they must understand the price they’ll have to pay if they fall into non-compliance.

Proactively sharing your knowledge with your professional network could allow you all to stay on the same page, helping to ensure more cohesive working relationships down the road.

Connect with your solopreneur clients

Don’t let your solopreneur clients get lost in the shuffle. When researching this topic, we uncovered confusion from solo entrepreneurs regarding the December 31, 2025 deadline. It mandates that companies with between 1 and 4 employees are obligated to establish a retirement plan or enroll employees with CalSavers. If your client runs a business of 1, does that include them?

No, it does not include solo entrepreneurs. Your solo clients may breathe a sigh of relief to hear that…if they’re misinformed, that is. Because, while they may be exempt from California’s retirement savings mandate, that doesn’t mean their retirement planning should fall by the wayside.

After all, shouldn’t all their sweat equity and hard work pay off with big retirement savings? Now is your chance to present them with their options, such as a solo 401(k), so they can start preparing for their future. As a trusted authority in your industry, it’s necessary to make sure that no client gets left behind in the journey to saving for a comfortable retirement.

Review the benefits of establishing a retirement plan

Initially, your clients may have reservations about sponsoring a retirement plan for their employees, even if it’s a legal requirement. Common objections range from setup is too difficult to retirement plans are too expensive. By anticipating these objections, you’ll be ready to provide them with an exceptional solution.

For starters, your clients can have an ePlan 401(k) plan set up in just 15 minutes and ready to fund within 24 hours. We’ll even provide smooth plan administration so they can rest easy.

Your clients might think that sponsoring a plan isn’t worth the expense, but what they may not realize is changes from the SECURE Act allow special tax breaks for employers who setup new retirement plans, add an automatic enrollment feature, and provide employer contributions.

You can even help seal the deal by showing them their savings potential with our Tax Credit Estimator. Simply enter information about your client’ companies into the estimator and click calculate. You’ll be able to show your clients their potential tax savings in real time.

Compare the CalSavers IRA to the advantageous alternative— ePlan Services’ 401(k) plan

Unlike the CalSavers IRA which doesn’t permit employer contributions, an ePlan Services 401(k) plan will allow higher contribution limits for participants, matching or profit-sharing employer contributions, and higher catchup contributions for participants when they reach the age of 50 and older.

Let’s take a closer look at how ePlan Services stacks up against CalSavers.

Take the initiative to capitalize on this need by presenting them with a retirement plan that will keep money in their pockets, provide greater savings potential for their employees, and satisfy California’s retirement savings requirements. 

Prepare your clients in other states

CalSavers is not a one-off. Other states are close behind. Now is the time to reach out to your out-of-state clients and educate them early about the mandates that are on the horizon in their states. A few states with upcoming employer registration deadlines for eligible businesses are as follows:

• Nevada, (NEST) —July 1, 2025
• OregonSaves—*July 1 of each year for newly mandated employers
• Connecticut, (My CTSavings) —*August 31 of each year for newly mandated employers

Presenting contacts in these states with their best options now could lead to successful retirement plan sales in the future.

Conclusion:

December will be here before we know it: don’t let California’s mandate enforcement bite your clients. Contact your network (including solo entrepreneurs) and start those conversations now. Brush up on common objections to establishing a 401(k) and be prepared to demonstrate how valuable they can be for your clients. Start talking to employers in states who will soon be in a similar position to Californian small business owners. In California alone, 75% of businesses will be impacted by mandate enforcement on December 31, 2025.