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Colorado announces state-run retirement savings pilot program

Up to one million Coloradans could benefit from a new retirement savings program, the state treasurer said.
(Ryan Remiorz, The Canadian Press)

The Colorado Department of the Treasury announced Wednesday the first participants in a new pilot program that would help residents who don’t have access to a retirement savings plan through their employer. 

The Colorado SecureSavings Program could help up to one million residents in our state, said Dave Young, Colorado state treasurer.

“That’s 40% of the private sector workforce that work in a place that doesn’t offer to save for retirement,” Young said. “It’s tough, particularly for smaller businesses, to set something like this up. It’s expensive, it involves a lot of financial and legal work, and so we know it’s a problem if we don’t get people starting to save.”

Many Coloradans end up relying only on Social Security, Young said.

“They get driven into poverty in retirement, and that’s terrible — for somebody who’s worked their entire career, then poverty in retirement is unconscionable,” he said. “Probably they’re going to end up on safety net services like Medicaid, as well as Medicare, housing support, food security supports — which are all taxpayer-funded services.”

Over the next 15 years, those additional services for retirees will cost Colorado taxpayers $15 billion, Young said.

“Savers themselves pay for this program, so there are fees associated with it — the legislature, when they passed the bill, said that the fees could be no higher than 100 basis points, which is essentially 1%,” he said. “We want that to become lower over time — we’re required over 5 years to lower it down to 75 basis points, which is three-quarters of a percent.”

The program also allows smaller businesses to be more competitive and offer a more comprehensive compensation package, he explained.

The program targets private-sector workers who are self-employed, part-time or seasonal — such as rideshare drivers, ski instructors and farmers.

“Unlike employees whose employers provide retirement and other benefits, farmers and ranchers need to develop their own retirement plans, not to mention find and pay for their own health insurance,” said Robert Kjelland, communications director for the Rocky Mountain Farmers Union. “Programs that make retirement planning accessible and affordable are likely to be welcome by many in production agriculture.”

Kjelland said it’s too early for his union to comment on the new pilot program, but that the group may be interested in such an initiative.

 “As a grassroots organization, the members of Rocky Mountain Farmers Union discuss and adopt policy priorities. These members will meet at their annual convention next month to do this,” Kjelland said. “They may look at the new Colorado Secure Savings program and consider how it will work for them.”

The Colorado SecureSavings Program participants include 20 businesses from across the state:

  • Aspen Park Veterinary Hospital, Conifer
  • Blue Bonnet Restaurant Corporation, Denver
  • Boselli Investments LLC, Westminster
  • Doggie Pause LTD, Denver
  • Evan's AutoCare, Evergreen
  • Frontera Group LLC, Boulder
  • Junct’n Pizza, Hangdog Hospitality, Grand Junction
  • High Plainz Strains, Garden City, Log Lane Village, Sedgwick
  • Indian Rasoi LLC, Broomfield
  • Kind Hearts Home Health Care LLC, Colorado Springs
  • Mary Janes Glass Haberdasher, Pueblo
  • Nature's Herbs & Wellness, Ft. Morgan, Garden City, Milliken
  • Sazza Restaurant, Greenwood Village
  • Sterling Rod & Custom Auto Restoration, Sterling
  • Sullivan's Scrap Kitchen, Denver
  • Superior Child Care, Greeley
  • Sweetwater Partners LLC, Denver
  • Vending by A+A, Sedgwick
  • VistaCraft LLC VistaCraft, Monument
  • Wood’s High Mountain Distillery LLC, Salida

Unlike traditional retirement plans, the state program is tied to an employee, so if they switch jobs, no paperwork is required, Young said. 

In late 2021, Colorado and New Mexico became the first two states in the country to sign a Memorandum of Cooperation that aims to provide residents in both states with individual retirement accounts. The partnership would allow both states to lower fees for those who are registered in the program, Young said.

Full implementation of the Colorado SecureSavings Program is set to begin in January 2023.