AB2650 - CalSavers: retirement savings.

Amended IN Assembly May 22, 2026 Amended IN Assembly May 18, 2026 Amended IN Assembly March 24, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 2650 Introduced by Assembly Member Pellerin February 20, 2026 An act to amend Sections 100000, 100002, 100004, 100008, 100010, 100012, 100016, 100022, 100026, 100030, 100032, 100033, and 100046 of, and to repeal Sections 100018, 100020, 100024, and 100028 of, the Government Code, and to amend Sections 19287 and 19288 of the Revenue and Taxation Code, relating to retirement, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 2650, as amended, Pellerin. CalSavers: retirement savings. Existing law, the CalSavers Retirement Savings Trust Act, administered by the CalSavers Retirement Savings Board (board), establishes the CalSavers Retirement Savings Program (program) and the CalSavers Retirement Savings Trust (trust). Under existing law, the trust consists of a program fund and an administrative fund with trust moneys that are continuously appropriated and administered by the CalSavers Retirement Savings Board for the purpose of promoting greater retirement savings for California private employees. Existing law requires eligible employers to offer a payroll deposit retirement savings arrangement so that eligible employees may contribute a portion of their salary or wages to a retirement savings program account in the program, as specified. Existing law defines “eligible employer” as a person or entity engaged in a business, industry, profession, trade, or other enterprise in the state, whether for profit or not for profit, excluding, among others, specified federal, state, and local governmental entities, with at least one eligible employee and that satisfies certain requirements to establish or participate in a payroll deposit retirement savings arrangement. This bill would enact the Savings Access and Vested Empowerment (SAVE) for All Workers Act, which would recast those provisions to expand that definition of “eligible employer” to include household employers, defined as those who have hired or contracted someone to work in or around their home for the benefit of their personal household and who provide the employee a W-2 federal tax form to evidence tax deductions at the federal and state level. form. By expanding eligibility under these provisions, the bill would remove a restriction limiting expenditure of funds and authorize the expenditure of continuously appropriated moneys for a new purpose, thereby making an appropriation. Existing law requires the board, subject to its authority and fiduciary duty, to design and implement the program. Existing law authorizes the board to provide for investment in myRAs. Existing law requires the program to include, as determined by the board, one or more payroll deduction IRA arrangements. Existing law provides the board with the power and authority to, among other things, make and enter into contracts necessary for the administration of the trust and to disseminate information concerning tax credits available to small business owners for allowing their employees to participate in the program and the federal Retirement Savings Contribution Credit (Saver’s Credit). This bill would eliminate the authority of the board to invest in myRAs and would make related conforming changes. The bill would require the program, with board approval, to establish an IRA on behalf of participants who are eligible to receive federal or state retirement benefits, as specified, and notify participants at least 30 days prior to the creation of the accounts. This bill would additionally authorize the board to assess the feasibility of multi-state or regional agreements to administer the program and to disseminate information concerning tax credits available to small business owners for allowing their employees to participate in the successor to the Saver’s Credit, known as the Saver’s Match. Existing law requires the board, prior to opening the program for enrollment, to establish a retirement investments clearinghouse on its internet website and a vendor registration process, if there is sufficient interest by vendors to participate and provide the necessary funding. Existing law requires vendors that would like to participate in the board’s retirement investments clearinghouse and be listed on the board’s internet website as a registered vendor to provide specified information to the board. This bill would eliminate the above-described requirement for the board to establish a retirement investments clearinghouse on its internet website and a vendor registration process, and would instead require vendors that would like to contract with the board to provide specified information to the board. The bill would make related conforming changes. Existing law authorizes an employer to choose to have a payroll deposit retirement savings arrangement to allow employee participation in the program under the terms and conditions prescribed by the board. Existing law requires, by December 31, 2025, eligible employers with one or more eligible employees and do not offer a retirement savings program, as provided, to have a payroll deposit retirement savings arrangement to allow employee participation in the program. Existing law authorizes the board to implement annual automatic escalation of employee contributions and prohibits contributions subject to automatic escalation from exceeding 8% of salary. Existing law provides the board the powers and duties necessary to administer the enforcement of employer compliance, as provided. This bill would instead, would, beginning December 31, 2027 and by December 31 of each calendar year, require eligible employers with one or more eligible employees employees, as described, who do not offer a retirement savings program, as specified, to have a payroll deposit retirement savings arrangement to allow employee participation in the program. The bill would instead prohibit contributions subject to automatic escalation from exceeding 10% of salary. The bill would require the board to notify participants of this increase in salary subject to automatic escalation. Existing law requires the board to issue to each employer who fails to allow its eligible employees to participate in the program, as provided, a notice of penalty application. Existing law requires each eligible employer that, without good cause, fails to allow its employees to participate in the program, as specified, after the board serves a final notice of penalty application, to be subject to a penalty of $250 per eligible employee and an additional penalty of $500 per eligible employee if noncompliance continues, as described. Existing law requires the Franchise Tax Board to issue a first notice of the imposition of a penalty to an eligible employer for failure to comply after the board informs the Franchise Tax Board of the eligible employer’s noncompliance. Existing law requires amounts collected by the Franchise Tax Board for these purposes to be transmitted to the board for deposit in the trust. This bill would additionally subject each eligible employer that fails to allow its eligible employees to participate in the program after the above-described penalties have been assessed to a penalty of $500 per eligible employee. The bill would prohibit the penalties assessed from being imposed more than once every 180 days since the last violation. The bill would require the Franchise Tax Board to issue subsequent notices of imposition of penalties for noncompliance, as specified. By depositing additional penalties into the trust, a continuously appropriated fund, the bill would make an appropriation. Digest Key Vote: 2/3 Appropriation: YES Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. This act shall be known, and may be cited, as the Savings Access and Vested Empowerment (SAVE) for All Workers Act. SEC. 2. Section 100000 of the Government Code is amended to read: 100000. For purposes of this title, the following definitions apply: (a) “Board” means the CalSavers Retirement Savings Board. (b) “CalSavers Retirement Savings Program” or “program” means a retirement savings program offered pursuant to the CalSavers Retirement Savings Trust Act. (c) (1) “Eligible employee” means a person who is employed by an eligible employer. (2) “Eligible employee” does not include: (A) Any employee covered under the federal Railway Labor Act (45 U.S.C. Sec. 151), or any employee engaged in interstate commerce so as not to be subject to the legislative powers of the state, except insofar as application of this title is authorized under the United States Constitution or laws of the United States. (B) Any employee on whose behalf an employer makes contributions to a Taft-Hartley pension trust fund. (d) (1) (A) “Eligible employer” means a person or entity engaged in a business, industry, profession, trade, or other enterprise in the state, whether for profit or not for profit, excluding sole proprietorships, self-employed individuals, or other business entities that do not employ any individuals other than the owners of the business, the federal government, the state, any county, any municipal corporation, or any of the state’s units or instrumentalities, that has at least one eligible employee and that satisfies the requirements to establish or participate in a payroll deposit retirement savings arrangement. (B) (i) “Eligible employer” also includes household employers. (ii) “Household employers” includes those who have hired or contracted someone to work in or around their home for the benefit of their personal household and provide the employee a W-2 federal tax form to evidence tax deductions at the federal and state level. form. (2) Upon a positive determination pursuant to subdivision (a) of Section 100046, eligible employer means an employer of a provider of in-home supportive services, as regulated by Article 7 (commencing with Section 12300) of Chapter 3 of Part 3 of Division 9 of the Welfare and Institutions Code. (3) “Eligible employer” does not include an employer that provides a retirement savings arrangement as described in Section 100032. (e) “IRA” means an individual retirement account or individual retirement annuity under Section 408(a), 408(b), or 408A of Title 26 of the United States Code. (f) “Participating employer” means an eligible employer that provides a payroll deposit retirement savings arrangement provided for by this title for eligible employees. (g) “Payroll deposit retirement savings arrangement” means an arrangement by which an employer allows employees to remit payroll deduction contributions to a retirement savings program, which may include an IRA, and in the case of a payroll deduction IRA arrangement, to remit specifically to an IRA. (h) “Trust” means the CalSavers Retirement Savings Trust established by this title. (i) “Vendor” means a registered investment company or admitted life insurance company qualified to do business in California that provides retirement investment products. “Vendor” also includes a company that is registered to do business in California that provides payroll services or recordkeeping services and offers retirement plans or payroll deduction IRA arrangements using products of regulated investment companies and insurance companies qualified to do business in California. “Vendor” does not include individual registered representatives, brokers, financial planners, or agents. SEC. 3. Section 100002 of the Government Code is amended to read: 100002. (a) (1) There is hereby created within state government the CalSavers Retirement Savings Board, which shall consist of nine members, with the Treasurer serving as chair, as follows: (A) The Treasurer. (B) The Director of Finance, or the director’s designee. (C) The Controller. (D) An individual with retirement savings and investment expertise appointed by the Senate Committee on Rules. (E) An employee representative appointed by the Speaker of the Assembly. (F) A small business representative appointed by the Governor. (G) A public member appointed by the Governor. (H) Two additional members appointed by the Governor. (2) Members of the board appointed by the Governor, the Senate Committee on Rules, and the Speaker of the Assembly shall serve at the pleasure of the appointing authority. (b) All members of the board shall serve without compensation. Members of the board shall be reimbursed for necessary travel expenses incurred in connection with their board duties. (c) A board member, program administrator, and other staff of the board shall not do any of the following: (1) Directly or indirectly have any interest in the making of any investment made for the program, or in the gains or profits accruing from any investment made for the program. (2) Borrow any funds or deposits of the trust, or use those funds or deposits in any manner, for themselves or as an agent or partner of others. (3) Become an endorser, surety, or obligor on investments by the board. (d) The board and the program administrator and staff, including contracted administrators and consultants, shall discharge their duties as fiduciaries with respect to the trust solely in the interest of the program participants as follows: (1) For the exclusive purposes of providing benefits to program participants and defraying reasonable expenses of administering the program. (2) By investing with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an enterprise of a like character and with like aims. (e) The board, subject to its authority and fiduciary duty, shall design and implement the CalSavers Retirement Savings Program. (1) The board shall maintain an investment policy statement that defines the program’s investment objectives and articulates policies and procedures enabling investment objectives to be met in a prudent manner. The board shall seek to minimize participant fees and strive to implement program features that provide maximum possible income replacement balanced with appropriate risk in an IRA-based environment. The investment policy statement shall describe the investment options available to holders of individual savings accounts established as part of the program. The investment policy statement shall include a risk management and oversight program. Investment options may encompass a range of risk and return opportunities and allow for a rate of return commensurate with an appropriate level of risk to meet the investment objectives stated in the policy. (2) The board shall annually review the investment policy statement. The board shall review the investment policy statement and any changes in the investment policy statement at a public hearing. (3) The risk [Text truncated for display. Full text available on Congress.gov.]