The Bankers Role in Navigating California’s Retirement Mandate
The Bankers Role in Navigating California’s Retirement Mandate
If you find yourself in the world of banking, you're no stranger to regulation—but the CalSavers Retirement Savings Program, set to fully take effect by the end of 2025, is more than just another mandate. It’s a regulatory milestone that presents both a risk for the unprepared and offers a chance for proactive institutions to provide clarity, support, and added value to their business clients.
Here’s why CalSavers should be on your radar—and how your bank can lead the charge.
The What: A Mandate with Momentum
CalSavers is California’s state-run retirement savings program designed for workers whose employers don’t offer a retirement plan. It's a response to a growing retirement savings crisis—nearly half of California's private-sector workers have no access to a workplace plan.
The Deadline: By December 31, 2025, every California employer with at least 1 employee (excluding the owner) must either:
1. Enroll in CalSavers, or
2. Offer a qualified private retirement plan (like a 401(k)).
Non-compliance brings penalties starting at $250 per eligible employee, doubling to $500 after 90 days.
The Why: Implications for Your Bank’s Business Clients:
Many small and mid-sized businesses are heads-down, focused on day-to-day survival — navigating inflation, labor shortages, and post-pandemic recovery. Retirement plan compliance isn’t just low on their list — for many, it’s not on the list at all. For your bank, this represents a crucial opportunity to proactively support your business clients as they navigate the complexities of the retirement mandate. By offering clear guidance and access to appropriate retirement solutions, you can help clients meet regulatory requirements while reinforcing your bank’s commitment to their long-term success.
In doing so your bank will:
• Strengthen commercial relationships by helping clients avoid costly compliance penalties
• Support and guide clients in meeting regulatory requirements efficiently and with confidence
• Differentiate yourself from competitors slow to act by providing clarity during a complex regulatory change
The Opportunity: Be the Bridge
Instead of allowing clients to default into CalSavers—a state-run Roth IRA program with limited flexibility, income restrictions, and no option for employer contributions—your bank has an opportunity to offer real value. Many business owners may not be aware that they have options beyond the state mandate, and this is where your guidance becomes essential.
By introducing the benefits of a private 401(k) plan, you can help clients see the advantages of taking a more tailored, strategic approach to retirement planning. A well-designed 401(k) offers:
• Broader investment options that may align more closely with participants' long-term goals
• Employer match capabilities that can help attract and retain talent
• Potential tax advantages for both the employer and employee
• Greater plan design flexibility, allowing businesses to customize features like vesting schedules, eligibility requirements, and contribution structures
Your bank is in a unique position to lead this conversation and deliver meaningful value by:
• Hosting informational webinars and educational events to help business owners understand their options and obligations
• Proactively reaching out to clients ahead of the December 31, 2025 deadline, ensuring they have time to evaluate and implement the right solution
• Partnering with experienced retirement advisors (like us!) to provide end-to-end support—from plan selection and setup to ongoing management and compliance
By taking initiative now, your institution can not only help clients avoid rushed decisions and potential penalties but also position itself as a trusted source of clarity and leadership during a time of regulatory change.
Final Thought: Lead the Conversation
Financial institutions that educate and engage early may be better positioned to build trust—and potentially uncover new business opportunities. CalSavers isn’t just another compliance task; it could be a valuable opportunity to open more strategic conversations with your business clients.
While employers must act by the end of 2025, this may be the right time for your bank to begin the conversation now.
Impact Retirement Advisors is always available as a resource to support you through these changes and answer any questions you may have. Please don’t hesitate to reach out if you need guidance or assistance.
DISCLOSURES The views, opinions and content presented are for informational purposes only. Advisory services offered through Impact Retirement Advisors, LLC., an Investment Adviser registered with the U.S. Securities & Exchange Commission. The information is not intended to be, and should not be considered as, impartial investment advice or an offering of investment advisory services. The information contained herein may be subject to change at any time without notice. Past performance is not indicative of future results.
o opportunities — for your clients and your institution.