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In 2019, the Colorado Legislature created C.R.S. 24-54.3-101 et seq., known as the Colorado Secure Savings Program Act, to promote retirement savings. Since its passage, there has been a rulemaking process to develop the program. It is now nearly complete, and the program is scheduled to become active in January 2023. There will be some requirements for every employer with five or more employees in Colorado if the business has been active for at least two years.

The Colorado Department of the Treasury will institute the program in coordination with the Colorado Department of Labor. They will determine all subject employers in Colorado, and notices will be sent to employers based on Form 5500 filings. A Form 5500 Filing means the Annual Return/Report of Employee Benefit Plan that is required to be filed for certain employee benefit plans under sections 104 and 4065 of the Employee Retirement Income Security Act (ERISA) and sections 6057(b) and 6058(a) of the Internal Revenue Code.

An online portal for onboarding to the plan is not yet available but will be prior to January 2023. All employers eligible for the plan must access this portal, even if exempt by having a private retirement program. A tax-qualified retirement plan is needed for exemption, meaning, for purposes of the program, an employee benefit plan that is qualified under section 401(a), 401(k), 403(a), 403(b), 408(k), 408(p), or 457(b) of the Code. A certificate of exemption will be issued after showing exemption on the onboarding portal.

All subject employers need to access the portal and enroll or certify they are exempt. The process is projected to take two minutes or less for exempt employers. The obligations for subject employers are threefold:

• Access the portal and either certify as exempt or enroll in the plan.

• If not exempt, enroll individual employees in the plan. The portal simplifies the process, as it is integrated with many common payroll systems.

• Withhold and remit payments after a 30-day opt-out period for the employees after enrolling individuals.

Employees will receive a notice from the program after enrollment and will be expected to understand their rights and obligations. Employees have the option to opt out after enrollment. Employers are restricted from counseling employees to either stay enrolled or opt out. After enrollment, employees can change elections, contributions, and allotments just as in any other retirement plan. Employers are not allowed to match contributions by employees.

Individuals who are gig workers, independent contractors, or employees of an establishment with fewer than five employees can opt in on the onboarding portal.

Employers must keep the plan administrator informed of any changes that affect eligibility, such as the number of employees or the creation or closing of a private plan. The individual employee accounts are portable, as in other retirement plans.

Enforcement of this statute will begin 12 months after opening enrollment. Fines will be levied three months after a notice of noncompliance is issued. Fines, which will be issued in the first quarter of 2024, are $100 per employee per year, not to exceed $5,000 a year.

The proposed rules, soon to be final, can be downloaded here. Please email the Employers Council Member Experience team if you have any questions.