State auto-IRA mandates
State auto-IRA mandates, with California's CalSavers as the example: who must facilitate it, the penalties, and how a plan of your own exempts you.
A state auto-IRA is a state program an employer must make available if it offers no retirement plan of its own. California's is CalSavers: state law generally requires every California employer with one or more employees that does not offer an employer-sponsored plan to facilitate its employees' participation. Employer participation is mandatory; employees can opt out.
The penalties are per eligible employee: $250 if noncompliance continues after the program's final notice, and a further $500 if it continues 90 days after the Franchise Tax Board's first notice. Offering any qualified plan — a 401(k), a SIMPLE IRA — takes the employer out of the mandate. Other states run programs of their own; check each state where you have employees.
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Anything marked as a convention is ours, not the rule-maker's.
- State authority
- California FTB — Bill analysis, AB 2650 (2026), Current state law (opens in a new tab)CalSavers: California's auto-IRA mandate and its penaltiesPDF · Free to read
The words this page teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.