The Colorado State legislature created a board to create and implement the Colorado Secure Savings Program to address the forty percent of the Colorado workforce who do not have access to a retirement savings account or program at work. The Board has been meeting regularly since October 2020, and much of the proposed rulemaking and program design is still to come over the next few months. The Board is learning from other states, such as California, Illinois, and Oregon, which have implemented state programs. In addition, Colorado and New Mexico are partnering to create the first multi-state, auto-enroll IRA program. Workers in Colorado and New Mexico will be able to carry their automatic retirement savings across state lines, ensuring they can maintain a truly portable retirement program. The New Mexico State legislature passed the Work and Save Act, creating a voluntary program for private employers starting in 2024.
Most employers want to know what will be required of them and when. The Colorado Secure Savings Program will require employers who are not offering a workplace retirement savings plan to enroll in the Program. Employers will continue to have the option of sponsoring their own plans. The Program will be administered at no cost to employers, no matching requirements are required, and it is expected to be compatible with payroll systems. Employers will need to automatically enroll employees and implement annual automatic escalation for contributions. Employees can opt out of the program, increase or decrease their after-tax savings amount and choose their investment options within this portable IRA plan.
A voluntary pilot program for employers is expected to start the fourth quarter of 2022 with a proposed entry date of January 1, 2023 for all employers. Fines for non-compliance would take a phased approach based on employer size with fines starting in 2024.
You can find the CSSP fact sheets for employers and employees on the Colorado Treasury department’s website.
Employers Council will continue to update its members on the Colorado Secure Savings Program, and you may go to the Colorado Treasury’s website.
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