Colorado
On July 14th 2020, Governor Jared Polis (D) signed into law the Colorado Secure Savings Program Act, which implemented a statewide retirement savings program for all private-sector employees in the state not currently enrolled in a retirement plan to participate in a state-facilitated automatic enrollment individual retirement account (IRA) program.
Legislative Summary:
Senate Bill 20-200 was originally proposed in March 2020 and jointly sponsored by state Senators Kerry Donovan (D) and Brittany Pettersen (D) and state Representatives Tracy Kraft-Tharp (D) and KC Becker (D). The Colorado Senate passed the bill on June 6th and the House passed it on June 12th. The Senate ratified the amended bill on June 13th, 2020
Program Description:
Colorado Secure Savings is a new retirement savings (Automatic IRA) program, created by the Colorado Secure Savings Board in the Department of the Treasury. The program is meant to prepare people for retirement by nudging them into saving money, which means facilitating automatic enrollment of every employee into a state-facilitated payroll-deduct Roth IRA.
Affected Employers:
Colorado employers (who have been in business for two or more years) with five or more employees (who have worked for you for at least 180 days), and do not currently offer a payroll-deduct retirement savings program (e.g., 401k plan).
General Requirement:
Automatic enroll employees at 5% deferral with annual increases of 1% (up to a maximum of 10%) of the enrollee’s wages. Every affected employer must register and choose to opt-in or claim exemption.
Launch Status:
October 1, 2022
Full Implementation:
| Deadline | AFFECTED EMPLOYERS |
|---|---|
| March 15, 2023 | 50+ Employees |
| May 15, 2023 | 15 – 49 Employees |
| June 30, 2023 | 5 – 14 Employees |
Compliance Deadline:
February 1, 2024 – 5+ Employees
Non-Compliance Penalties:
$100/employee, up to $5,000, for any part of a calendar year that employer is non-compliant
Employer Costs:
N/A
Employee Costs:
1.24% account balance
Investments:
he program offers a suite of target date funds (TDFs), as the default investment option, and additional investment options – including capital preservation, core fixed income, global equity and balanced ESG funds.
