• April 22nd, 2024
  • Monday, 10:24:05 AM

Colorado SecureSavings Program to Address State’s Retirement Saving Gap


Photo: Adobe Stock A new state-run retirement program will offer non-traditional workers a viable pathway to retirement.

 

By Benjamin Neufeld

 

Colorado Treasurer Dave Young recently announced the launch of Colorado’s new state-run retirement program, Colorado SecureSavings. The program is designed to give non-traditional workers—such as gig-workers, seasonal workers, or small-business employees—a viable pathway to retirement.

 

Photo: Office of Colorado Treasurer Colorado Treasurer Dave Young recently announced the launch of a new state-run retirement program.

According to Colorado SecureSavings, “Here in Colorado, more than 40% of our private-sector workforce does not have access to a retirement savings plan at work — nearly 940,000 workers. Colorado SecureSavings was created to meet this urgent need.”

 

“We know that if we don’t do something about this retirement savings gap we have here [in Colorado]…[then] over the next 15 years taxpayers will be on the hook for 18 billion dollars [in] social safety net services,” said Young.

 

The press conference highlighted the success of the SecureSavings pilot program. It featured small business owners who participated in the program as guest speakers and discussed the details of how the program will be implemented over the next few months. Program board members, advocates, supporters, and community members, as well as the director of the program, Hunter Railey, also spoke at the press conference which took place over Zoom due to last Wednesday’s snowstorm.

 

The program’s key feature is its transferability. It allows employers to contribute to a retirement account that is tied to the employee rather than the employer. According to coloradosecuresavings.com, “businesses can help their employees save for retirement in a convenient Roth Individual Retirement Account (IRA) that is portable even if they change or leave their job.”

 

It also allows employees flexibility to determine and adjust their withholding rates. Workers might decide to lower their withholding rate during times of financial strain then increase their withholding rate when it becomes viable. Pilot program participant Lee Wood, the owner of Wood’s High Mountain Distillery in Salida, described how his employees make significantly more income during the busy summer tourist season and less during the winter months. His employees will be able to adjust their withholding rates according to this seasonal tempo.

 

Kerry Donovan, a former member of the Colorado State Senate from Vail and a prime sponsor of the Colorado SecureSavings Plan, echoed Lee, saying “growing up in a resort community” she saw many people working multiple jobs in the tourism industry who couldn’t manage to save money the way people with traditional careers could. “For a lot of people, this is going to be a life changing bill,” she said.

 

Chrissy Strowmatt, owner of the Blue Bonnet Restaurant in Denver, also testified to her success with the SecureSavings pilot program. “Most of my employees are long-term employees and have been needing something like this for a very long time,” she said. “We had looked at a 401k program for our staff for years and years, and every time I asked for bids, the bids came back incredibly expensive: thousands to enroll in a program and thousands every year to administer the program. And that just wouldn’t be possible for us, and I wouldn’t think it would be possible for most small businesses.”

 

Strowmatt says her staff embraced the program with 15 of them signed up so far, and that the process to get set up was simple and easy for both her as an employer and for her employees.

 

Railey, the program director, also claimed there is a “really straightforward process for onboarding.” He said his team found that the average employer participating in the pilot program took about 10 to 15 minutes to upload their employee roster to the program. To ensure the success of the program’s launch, he said, “basically any industry operating in the state [was] represented in that pilot program.”

 

All “eligible Colorado employers” that do not already offer a retirement program will be required to facilitate Colorado SecureSavings according to the program website. Businesses/employers with 50 or more employees must register by March 15 of this year. Businesses with 15-49 employees must register by May 15, and businesses with 5-14 employees must register by June 30.

 

Railey says that employees who choose to sign up to make contributions through the program will be subject to a 30-day informational period. They will also be offering a financial literacy program.

 

 

Benjamin Neufeld is an Independent Reporter for The Weekly Issue/El Semanario.