Who

Bargaining Unit 6 employees who are active or on leave in a full-time, permanent position

• This includes class type F and L and Excluded employees who are in positions tied to Bargaining Unit 6.
• This population will hereinafter be referred to as "Eligible employees."

What and when

Eligible employees will automatically receive a monthly employer contribution to their pre-tax Savings Plus 401(k) account.

The timing related to this program has two parts:

• All Eligible employees as of November 1, 2024, will receive a one-time employer contribution of $475 to their Savings Plus account. This one-time contribution will be applied in the November 2024 pay period. Access the Payroll Letter #24-019 (PDF) (PDF) about this benefit.
• Beginning with the January 2025 pay period, all Eligible employees will receive an employer contribution, equivalent to one percent (1%) of the employee’s monthly base salary a Savings Plus 401(k) plan as part of their monthly pay. Contributions will be reflected in the monthly earnings statement and will be posted to the Savings Plus 401(k) account as a pre-tax employer contribution.

Eligible employees should be able to see the contribution in their Savings Plus account within three business days of receiving their monthly earnings statement.

How it works

Let’s start by walking through the monthly process and what your employees will experience.

• A file is provided monthly from the State Controller’s Office (SCO) to Savings Plus that contains data for all Eligible employees. If an employee does not have a Savings Plus account, one will be created for the employee using the data provided by the SCO.
• Eligible employees will receive an employer contribution equal to one percent (1%) of the employee’s monthly base pay. Overtime and other special pay types are not included in the calculation for the employer contribution amount.
  • The employee will see this contribution on their earnings statement under Employer Share, listed as DEFCMP ER.
• Within the employee’s Savings Plus account, the employer contribution is tracked separately from the employee’s elective contributions. The employee will be able to see the contributions listed as “Employer Contribution” on their statements/online transaction history.
• The employer contribution has the same investment options as the elective employee contributions. Initial employer contributions will be invested in a Target Date Fund (TDF)   based on the employee’s date of birth. If an employee already has an investment election on file, or makes a change to their investment elections, the employer contribution will be invested in accordance with those directions
• The employer contribution does not count towards the annual IRS contribution limit. Employees can continue to voluntarily contribute to their 401(k) up to the maximum allowable limit set forth by the IRS. They can also voluntarily contribute to a Savings Plus 457(b) plan. View more information on IRS limits

HR roles and responsibilities

• Importance of timely keying in employment history (EH)
  Timely and accurate keying of an employee’s data into the SCO system is essential to ensure employee pay is issued correctly. This will allow contributions to be invested timely and will reduce the need for payroll corrections and retroactivity. Savings Plus will not correct employer contributions for lost earnings because of delayed posting. Therefore, it is critical that employee payroll information is keyed timely and accurately.
  
  SCO will run a monthly program one day prior to cutoff to determine the contribution amount for eligible employees. EH transactions that impact employee eligibility, or changes in base pay, should be prioritized and keyed prior to the day before monthly cutoff. This will ensure contributions are as accurate as possible.
  
  
• Importance of accurate employee data
  Accurate entry of employee data is critical – not only for Savings Plus, but for other employee benefits. For example, Savings Plus relies on SCO data exclusively for employee name, date of birth, SSN, and address while the employee is actively employed. Any information that is keyed incorrectly can impact the employee’s ability to access their benefits/accounts, hinder their ability to verify their identity, or, in the case of Savings Plus, delay the posting of contributions to the employee’s account.
  
  The most common error Savings Plus sees is the entry of the employee’s state in the address field.
  • The city and state are frequently entered incorrectly. The employee’s city and state should be entered into the same field and must be separated by two spaces.
  • The state should be represented by two characters which align with USPS standards. For example, CA is the correct entry for California.
  
  Please note that any changes to the information entered into SCO must go through the employees’ HR office and be updated in the SCO system while the employee is actively employed. This information is then transmitted to Savings Plus and updated monthly. Savings Plus cannot update employee’s demographic data (including name, date of birth, address, etc.)
  
  
• Importance of payroll validation
  It is important that all employee information is keyed timely and accurately so that when payroll runs, the deductions are correctly calculated and applied to eligible employees. If a contribution is not applied for an eligible employee (e.g., due to late keying), submit a STD. 674 to SCO to request the deduction.
  
  
• Retroactivity and you!
  SCO will have a quarterly lookback process to capture retroactivity; however, if it is identified prior to the quarterly run that an adjustment is needed, this should be requested by the department via a STD. 674. Adjustments beyond the current quarter will need to be requested by the department for review and processing. This would typically occur when appointments keyed after the cutoff date.

Savings Plus account set-up

• Providing contact information, including email and phone number, can be added to the account to allow Savings Plus to engage with the employee as needed and to share changes to the plan that impact participants;
• Creating an online account, with username and password, adds a layer of security to help protect your employee’s retirement savings from fraudulent activity. This prevents someone else from creating online access to the account using their information and establishes security verification information for the account;
• Setting up account alerts to notify you when transactions occur on your account, including contributions posting, or withdrawal activities, can your employees keep you aware and prevent unauthorized transactions from happening; and
• Creating an online account provides the employee with 24/7 access to their account via website or mobile app. The employee will be able to request changes to their elective contribution amounts, view their account balances and transactions, update their investment elections, and when the time comes, request distributions from their account.