Colorado’s state-run retirement savings pilot program has launched, the Colorado Office of the State Treasurer announced in a news conference Wednesday.
More than two dozen businesses are part of the program, and state officials plan to invite more businesses to participate over the next few months, said Dave Young, Colorado State Treasurer.
“The SecureSavings Program is a critical step to helping more people build long-term financial wellbeing — providing retirement plan access to savers and employees,” Young said during the news conference. “This is about helping more Coloradans sustainably retire with dignity — on their own terms.”
The state-run program is open to more than 1 million Coloradans who don’t have access to a retirement savings plan through their employer, Young said.
“This will save taxpayers an estimated $18 billion over the next 15 years,” he explained. “We know that Social Security is not going to be enough — we want people to retire with dignity and a bright future — not weighed down with having to apply for safety net services because they aren’t prepared with additional savings.”
The program will benefit workers such as farmers, rideshare drivers and ski instructors — those who work part-time or seasonally in the private-sector, Young said. The program also aims to provide options for people who are self-employed.
When businesses sign on with the SecureSavings Program, their employees gain access to a Roth Individual Retirement Account, which is portable and tied to the employee — if they switch jobs, no paperwork is required. The program is voluntary — employees can opt out, and they can control how much they choose to contribute.
The savers pay for the program with 32 cents for every $100 in their accounts, in addition to a $22 annual account fee.
Two business members of the pilot program joined the state press conference Wednesday — Chrissy Strowmatt of Blue Bonnet Restaurant in Denver and Lee Wood of Wood’s High Mountain Distillery in Salida. Both owners said they had been wanting to offer a retirement plan, but the costs of such a program were too high.
Both said they were grateful to be part of the new state-run pilot.
“We were able to get I think about 15 people signed up with hopes of getting more signed up now that we’re in it — the staff embraced it,” Strowmatt said during the news conference. “Most of my employees are long-term employees and have been needing something like this for a very long time.”
Wood said 7 out of 8 of his employees have signed up for the program.
“It’s been very well received,” Wood said. “We have some who have upped their percentage withholding.”
Businesses in the program take 5% of their employees’ gross income after taxes and contribute that to savings, but employees can opt for as low as 1%. Wood said one of his employees doubled their withholding to 10%.
“We’re busy in the summertime — that gives an opportunity for employees to increase their percentage over the course of the summer when tip revenue and that kind of thing is a lot higher,” Wood said.
Colorado businesses with more than five employees can enroll in the program. Employees must be age 18 or older, and have earned taxable wages from their employer for at least 180 days.
More than 40% of Colorado’s private-sector workforce does not have access to a retirement savings plan at work, Young said.