Choose the better path to savings with Ubiquity 401(k), a retirement solution that allows flexibility in set-up and investments, integrates with your payroll, offers higher savings for employees, and includes a tax credit for you.
55 million American workers—more than 40% of full-time private-sector employees—don’t have access to a workplace retirement savings plan. As very few employers offer pensions and Social Security is drying up, with funds expected to be depleted as soon as 2035, the responsibility for saving falls more on the individual than ever before. But that can all change this year.
Since 2012, at least 45 states have implemented or considered establishing state-facilitated retirement savings programs. Oregon, Illinois, and California are leading the charge.
Over the course of a 3-year rollout based on employer size, all California businesses with over 5 employees will be mandated to choose from the one-size-fits-all, state-provided, automatic Individual Retirement Account (IRA) or sign up for an eligible retirement plan with a private provider.
Employer Size Plan Setup Deadline More than 100 employees June 30, 2020 More than 50 employees June 30, 2021 5 or more employees June 30, 2022
Plan Setup Deadline
More than 100 employees
June 30, 2020
More than 50 employees
June 30, 2021
5 or more employees
June 30, 2022
CalSavers, the state-sponsored plan, offers a basic Roth IRA to help employees build their retirement savings. But with low contribution limits, limited investments, and limited tax advantages, is it the best solution for your team’s financial future?
At Ubiquity Retirement + Savings, we’ve been helping small businesses and their employees grow their nest eggs for over two decades with affordable, customized 401(k) solutions. While we believe the state’s program can be a valuable tool to help end the looming retirement crisis in California, a 401(k) might be a better alternative for your small business and your employees’ futures.
There are important differences between the state-sponsored plan and a Ubiquity 401(k). A 401(k) solution provides employers with the opportunity to maximize their contributions and tax savings while helping their employees save for the future. With a 401(k) plan you can contribute 3 times more than with an IRA, and there are other important customization options that a 401(k) plan enables. This chart streamlines those differences:
Typical State IRA
Maximum employee annual contribution amount
Additional annual employer contribution limit
Yes, up to an additional $40,500¹
Flat fees that don’t increase with your account balance
No, asset-based fees
Yes, flat fees
Tax credit that can total up to $5,500 per year – or $16,500 for the first three years of the new 401(k) plan2
Flexible auto-enrollment and vesting schedules
Investment guidance based on individual risk tolerance
Employee enrollment meetings and education
Auto-enrollment and escalation
Required at mandated levels
Optional and flexible
Customizable investment lineups
1. This limit is subject to cost-of-living increases for later years (for prior years, refer to this cost-of–living adjustment table.)
2. Available to eligible employers who have less than 100 employees who received at least $5,000 in compensation in the previous year, had at least one participant who was a non-highly compensated employee, and in the last 3-years did not contribute to a benefit plan for your employees through a plan sponsored by you or a member of a controlled group that includes you.
So why not opt for the smarter option? If you’re looking for the maximum savings potential and tax benefit, Ubiquity provides flat-fee and low-cost retirement plans, all delivered online to you and your employee. That means no hidden fees or AUM charges in the fine print. Since 1999 we have been singular in our focus on the un-served small businesses. We have helped hundreds of thousands of employees save towards their future.
But there is a misperception that setting up a retirement plan can be challenging, and oftentimes small businesses don’t have the time or the budget. That’s why Ubiquity created this Definitive Guide to Small Business 401(k), which includes everything you need to know about saving money for your business, your future, and without confusing language or too much financial jargon.
With this small business 401(k) guide, you’ll get the details how to:
Want to know more about California’s state-mandated retirement versus Ubiquity? We’ve got experts that have your back. Call us today at 855.912.6904 or email us at firstname.lastname@example.org