In July of 2020, the Colorado Secure Savings Program was signed, mandating businesses with at least five employees must offer access to individual retirement accounts. Since this ruling was signed in 2020, many employers may forget the requirements. Now that the program will be upheld and implemented in 2022, here is a reminder of what the program entails and how to prepare your business for it.
The Colorado Secure Savings Act is state-mandated legislation. The purpose of the act is to increase access to retirement savings for workers in Colorado. Some workers, as it stands, don’t have the ease of saving for retirement through their job.
To help workers save for retirement, the Colorado Secure Savings Act mandates that qualifying employers provide an employer-sponsored retirement plan funded through automatic payroll deductions. Though this is an additional burden for employers, there are many benefits to employer-sponsored retirement plans — for the employee and employer.
The deadline for compliance for the Colorado Secure Savings Program is 2023, but the pilot program will launch in October 2022. Employers aren’t currently responsible or being held accountable for anything just yet.
As an employer, you will be required to implement this program if:
Employees can voluntarily participate in the retirement plan if they are 18 years of age or older, employed by a Colorado employer for at least 180 days, and earn taxable wages.
Employers do NOT have to provide contributions to the retirement accounts — that is a voluntary option. Employers also don’t have to be the fiduciaries of the program.
Larger businesses will likely have to meet earlier deadlines while smaller businesses will be given more time. Regardless, the program is eventually going to happen and Colorado employers should prepare to be compliant or face up to a $5,000 fine.
Enforcement won’t begin until at least one year after the program is established — or one year after an employer is scheduled to enter the program based on the number of employees or years in business. The pilot program is set to begin in October 2022 with official enrollment starting in 2023.
Having a retirement plan option and even financial education tools is a great benefit to attract and retain employees. Take the following steps to get the most out of complying with this program:
The Colorado Secure Savings Act resulted in a new rule for Colorado employers. But it doesn’t have to be a burden. Employers should treat the program as an opportunity to improve their employees’ financial wellness. After all, offering financial wellness benefits helps attract and retain employees. So be sure to advertise your company offers retirement options.
Start with an employer-sponsored retirement plan, and then consider what other financial benefits you can offer your team. You’d be surprised at how many low-cost options there are that go a long way toward bettering your employees’ financial wellness.
We’ll keep you updated as registration deadlines for this program get finalized. But if you need support curating retirement plans, the administration of this program, and getting compliant, reach out to us, we’d be happy to help!
Read our guide for more information on this law, and others below.
Many new employment laws and regulations in Colorado were signed into effect in 2021. This year, those laws will be upheld. Use this guide to stay up to date on what laws and regulations your business needs to be compliant with and what to expect in the future.
