California’s retirement mandate requires many employers to offer a retirement savings option or enroll eligible employees in CalSavers. While CalSavers helps businesses comply with state requirements, it functions as a baseline solution, not a long-term strategy. For growing businesses focused on sustainable growth, employee retention, and meaningful financial benefits, CalSavers often falls short of what a modern workforce needs.

Understanding its limitations can help employers make a more informed decision about whether compliance alone is enough or if a more strategic retirement plan better supports both the business and its employees over time.

The Limits of CalSavers

CalSavers offers a simple way to meet California’s retirement mandate, but that simplicity comes with important limitations that business owners should consider:

· Limited investment options. Employees are placed into a preset investment lineup with very little flexibility. This approach does not account for individual goals, risk tolerance, or long-term financial plans.

· No employer contributions. CalSavers does not allow matching or profit-sharing contributions, removing a powerful incentive for employee engagement, retention, and recruitment.

· Lower contribution limits. CalSavers uses a Roth IRA structure, which sets much lower annual contribution limits than plans like a 401(k).

· Ongoing administrative responsibilities. Employers are still responsible for payroll deductions, employee tracking, and maintaining accurate records, even though the program is state-managed.

· Employee-level fees and missed tax advantages. While there is no direct employer cost, employees pay account fees that can impact long-term growth. Employers may also miss out on tax credits and deductions available through privately sponsored retirement plans.

CalSavers may fulfill the requirement, but it often falls short of supporting long-term business and employee financial goals.

Why Scout Wealth Advisors Is a Strong Option for Businesses

For businesses that want more than a basic retirement requirement, Scout Wealth Advisors offers a practical and flexible alternative to state-run programs like CalSavers. Instead of a one-size-fits-all solution, Scout helps employers build retirement plans that are aligned with how their business actually operates.

Scout works with businesses to explore retirement plan options such as 401(k)s, SIMPLE IRAs, and other qualified plans, helping employers choose a structure that fits their workforce size, goals, and budget. This allows companies to offer a benefit that can adapt and grow as the business evolves.

Unlike CalSavers, privately sponsored plans through Scout give employers the ability to contribute through matching or profit-sharing. These features can support employee participation while also providing potential tax advantages for the business and its owners.

Another advantage of working with Scout is coordination. Retirement planning is considered alongside investment management, tax strategy, and long-term wealth planning. This helps business owners make decisions with a clearer understanding of how each piece fits into the bigger picture.

As a fiduciary, Scout Wealth Advisors provides guidance that prioritizes the client’s best interest. The approach is thoughtful, transparent, and focused on helping businesses move forward with clarity rather than complexity.

Building More Than Compliance

Retirement benefits should do more than check a box. They should support your employees, strengthen your business, and align with your long-term vision.

CalSavers may serve as a starting point, but for growing businesses ready to think bigger, a customized retirement plan can create lasting value. With the right strategy and the right partner, retirement planning becomes an advantage rather than an obligation.

Out of Compliance. Into Clarity.

Retirement planning should support everything you are building, not slow it down with complexity or limitations. While CalSavers may satisfy a requirement, it rarely delivers the clarity, flexibility, or long-term value growing businesses need.

Scout Wealth Advisors helps business owners move out of the financial maze and into a clearer way forward. We design retirement strategies that integrate seamlessly with your broader financial picture, so decisions feel intentional instead of reactive. Less noise. Fewer trade-offs. More confidence in where you are headed.

If you are ready to move beyond basic compliance and toward a retirement plan built around your goals, reach out to Scout Wealth Advisors. Our team is here to help you find a clearer path forward and stay there.