Can I offer a 401(k) plan to my employees in California? What are the requirements?

Offering a 401(k) Plan to Employees in California

If you are an employer in California, you can offer a 401(k) plan to your employees. However, there are certain requirements that you must meet.

According to the Internal Revenue Service (IRS), the following requirements must be met:

• The plan must be established by an employer for the exclusive benefit of the employees and their beneficiaries.
• The plan must provide for contributions made by the employer, employee, or both.
• The plan must meet certain nondiscrimination requirements, which means that the plan cannot discriminate in favor of highly compensated employees.
• The plan must meet certain reporting and disclosure requirements.

Additionally, California has its own requirements for employers offering retirement plans. According to the California Secure Choice Retirement Savings Trust Act, employers with five or more employees must either offer a retirement plan or participate in the state’s CalSavers Retirement Savings Program.

Jurisdiction

California

• Labor