More Americans are having trouble saving for the future, due in large part to the rising cost of living and tumultuous economic climate. A 2024 survey conducted by AARP showed that only 36% of adults saving for retirement expect to be financially secure in their golden years. Meanwhile, another 33% of respondents state they won’t have enough money for retirement—an increase from 29% in January 2023.
In response, many states have begun implementing state-mandated retirement savings programs to give more people access to retirement plans and the benefits they bring. If your small business has employees in Colorado, here’s what you need to know about the state’s retirement savings plan mandate:
Quick Links
What is the Colorado SecureSavings Program?
The state of Colorado created the SecureSavings Program in 2020 to address the retirement crisis sweeping the nation. Its aim? To make saving for retirement more accessible to employees in the state.
As a result of the state-mandated retirement savings program, Colorado law requires employers to offer a qualified retirement savings plan or enroll employees in a state-sponsored Roth individual retirement account (or IRA for short).
The Colorado SecureSavings Program has also partnered with the New Mexico Work and Save program to make their Roth IRAs portable for plan participants who move from one state to the other, essentially creating the first multi-state IRA program in the US.
The SecureSavings pilot program started in October 2022 and officially launched in January 2023. Thanks to the state’s efforts, a 2023 Gusto report found that the Colorado SecureSavings mandate increased employer adoption of 401(k) plans by 45% and doubled enrollment across low-income workers in the state.
How does the Colorado SecureSavings Program work?
Unless they opt out, eligible Colorado employees are automatically enrolled into the program and fund their state-facilitated Roth IRA with automatic payroll deductions.
These retirement plans are funded with after-tax income, so money in the account grows tax-free, and employees don’t pay any income tax when withdrawing money during retirement. Non-qualified withdrawal of funds before the age of 59½, however, will result in a 10% penalty on the employee’s earnings.
The SecureSavings Roth IRA is portable, which means employees can take the plan with them from job to job without paying any fees or rolling over their funds into a new account.
Eligibility requirements and enrollment for employees
To be eligible for the SecureSavings Program, employees must meet the following criteria:
- Are at least 18 years old
- Have been employed by a Colorado employer for at least 180 days
- Earn taxable wages in the state
Once they meet the eligibility requirements, employees receive a notice from SecureSavings prompting them to create an account through the program’s online portal. There, they can enroll in a SecureSavings Roth IRA or opt out of the program. Employees who don’t take action will be automatically enrolled in SecureSavings after 30 days.
Those who want to opt out or re-enroll in the program can do so anytime by logging onto their online SecureSavings account.
Additionally, those in Colorado who are self-employed or don’t work for an employer enrolled in the program can still enroll in SecureSavings themselves. They set up their own account with the program’s online portal using their Social Security number, date of birth, and residential address. Once enrolled, they can begin contributing to their Roth IRA directly.
Contribution options for employees
The default contribution rate is 5% of employee wages, but employees can pay a minimum of 1% up to a maximum of 100% of their paycheck (up to the annual IRS limits for Roth IRA contributions). If left untouched by plan participants, the contribution rate will increase by 1% each January up to 8%.
Employees can change their contribution rate at any time by logging onto their SecureSavings account.
Investment options
By default, employee contributions will be invested in the Capital Preservation Fund for the first 30 days. After that period, funds will be invested in a Target Retirement Date Fund based on the participating employee’s date of birth.
Employees who want to choose how their funds are invested can choose between the following five fund options:
- Capital Preservation Fund
- Target Date Retirement Fund
- Bond Index Fund
- International Equity Fund
- US Equity Fund
Details about the investment options SecureSavings offers can be found on the program’s investments webpage.
If employees have questions about their plan, the Colorado SecureSavings Program offers participants online resources and support to inform them about their retirement savings options. For instance, those who need help choosing a savings rate can use the SecureSavings Retirement Calculator to select the best rate for their budget and retirement goals.
Plan fees for participating employees
Employees who participate in the Colorado SecureSavings Program are assessed an asset-based fee of about 0.32%, or about $0.32 for every $100 in assets, each year. They will also pay an annual $22 administrative fee, which is charged quarterly at $5.50.
How employees can opt out of the program
Once an eligible employee receives an invitation to the program, they have 30 days to customize their retirement savings options or opt out.
If they decide to opt out, they can do so by logging onto the Colorado SecureSavings Program online portal, calling (844) 711-5001, or mailing the Employee Opt-Out Form to the address below:
Colorado SecureSavings
PO Box 534490
Pittsburgh, PA 15253-4490
If an employee opts out of the program after the 30-day mark, employers will receive a notice to stop deducting plan contributions from their paychecks.
What employers need to know about the Colorado SecureSavings Program
Eligibility requirements and registration deadlines for employers
According to state law, private sector employers must enroll in the Colorado SecureSavings Program if they meet the following criteria:
- Are registered to do business in Colorado
- Have been in business for at least two years
- Have at least five employees
- Don’t offer a qualified employer-sponsored retirement plan
The state will contact eligible businesses once they meet the criteria above to let them know their registration deadline. Eligible companies that already offer an employer-sponsored retirement plan must apply for an exemption (more on this later).
Because the registration deadline for existing employers has already passed, those who haven’t enrolled or applied for an exemption must do so as soon as possible to reduce the risk of incurring penalties. For new businesses, the deadline to register is May 15, 2025.
Employers with fewer than five employees can also enroll in the program. To register, these companies would follow the same enrollment process as an eligible employer, which is outlined below.
Employer responsibilities under the Colorado SecureSavings Program
Once they receive a notice from SecuresSavings, all eligible employers must register their business using the program’s online portal so they can enroll or certify their exemption. Employers participating in the program must also keep their records, including employee lists and payroll information, up to date.
Colorado businesses that enroll in SecureSavings are not responsible for the following:
- Setting up employee Roth IRAs
- Managing employee investments
- Processing distributions from employee Roth IRAs
- Answering employee questions about the SecureSavings program
- Providing investment advice to employees
Additionally, employers are not required (and not allowed) to make matching contributions to employee accounts.
For more information on the Colorado SecureSavings Program, visit the state’s program details webpage.
Non-compliance penalties
Employers that fail to comply with the SecureSavings program’s requirements can face penalties of up to $100 per eligible employee per year, up to a total of $5,000 in fees per calendar year.
However, keep in mind that the state won’t charge fines until the year after an employer becomes eligible for the program.
How to register your business for the Colorado SecureSavings Program
Eligible businesses will receive an access code from the state by mail or email that they’ll use to enroll in SecureSavings or certify their exemption. Use that access code, along with the following information, to create an account with the SecureSavings online portal:
- Employer identification number (EIN)
- Payroll provider name (if applicable)
- Payroll schedule
- Business banking information for sending employee contributions
- Employee roster and personal information (including first and last name, contact info, date of birth, and Social Security number)
For more information on the SecureSavings registration process, you can review the step-by-step directions provided by the state.
Employers that already offer a qualified retirement savings plan must certify their exemption online through the SecureSavings online portal so they don’t get penalized by the state. To certify your company’s exemption, you’ll need the following information:
- Your EIN
- Your Colorado SecureSavings access code
- The details of the retirement plan you offer your employees
Benefits of the Colorado SecureSavings Program
Businesses of all sizes can now offer retirement options to employees
Some small and medium-sized businesses don’t have the resources or budget to offer employer-sponsored retirement plans. Because SecureSavings is free and easy to administer for business owners who enroll in the program, this option allows employees who work at these companies to still save money for retirement.
Companies that participate in SecureSavings can then take advantage of the benefits that come with this perk. These employers may see higher retention rates, lower turnover costs, and more job applicants for open positions.
The Colorado SecureSavings Program makes saving for retirement easy and accessible
The Colorado SecureSavings Program makes it easier for employees to save for retirement with a Roth IRA. Since employers must enroll in SecureSavings or a qualified alternative plan, more employees in the state now have access to a retirement plan. And even if an eligible employee doesn’t take any action, they can still expect to be auto-enrolled in a plan, make regular contributions, and increase their contribution rate over time.
Do businesses have to use the Colorado SecureSavings Program?
Businesses don’t need to enroll in the Colorado SecureSavings Program if they already offer a qualified retirement plan. These plans include:
- 401(k) or 401(a)
- 403(a)
- 403(b)
- 408(k)
- 408(p)
- 457(b)
Despite the benefits offered by the Colorado SecureSavings Program, its retirement plan may not make the most sense for some companies since it doesn’t offer many customization options for employers and their workforces.
Before enrolling in SecureSavings or a qualified alternative, do some research to determine which retirement plan is the best fit for your employees and your business. No matter which option you choose, you should be prepared to notify employees about your chosen retirement plan and when they can enroll.
If you offer an employer-sponsored retirement plan, you may also want to consider reading up on the Colorado SecureSavings Program in case employees who don’t qualify for your plan wish to enroll.
Spend less time managing employee benefits with Gusto
The Colorado SecureSavings Program integrates with major payroll providers like Gusto to help make managing administrative tasks easier. Alternatively, consider offering a 401(k) plan through Gusto for additional benefits for you and your team.
Here are some reasons why:
- Reduced cost with employer matching contributions and tax credits: Although Colorado offers grants to help offset implementation costs for eligible employers, the maximum amount you can receive is $300. In comparison, employer-sponsored retirement plans provide greater financial benefits for businesses, including tax-deductible employer matching contributions and up to $16,500 in tax credits for start-up costs.
- Flexible and affordable plan options: The SecureSavings program offers limited investment options, while Gusto’s growing list of 401(k) providers offers access to a broader investment menu at various price points.
- Integration with Gusto to make plan management easier: Gusto’s payroll system connects with your retirement plan for automatic payroll deductions and easier plan management. Employees can also manage their retirement plan details through their own Gusto account.
- Higher contribution limits for employees: A 401(k) plan’s higher contribution limits help employees save more money for retirement than they would with a SecureSavings plan. 401(k) plans can also give companies a competitive advantage over employers offering Roth IRAs.
If you need help choosing between a 401(k) and a SecureSavings Roth IRA, review the comparison chart below for a breakdown of the two plans:
| Features | 401(k) | Colorado SecureSavings Roth IRA |
| Auto-enroll | Available | 5% |
| Auto-escalation | Available | 1% increase every January up to 8% |
| Payroll integration | Available | Available |
| Investment options | Large range of funds that varies based on the provider | 14 funds |
| Employer matching and profit-sharing contributions | Available | No |
| Investment advice | Available | No |
| Taxability | Pre-tax and after-tax contributions available | Roth after-tax contributions |
| Annual contribution limit | $23,500 for employees ($31,000 for those aged 50-59 and $34,750 for those aged 60-63), plus optional employer contributions | $7,000 for employees ($8,000 for those 50 and older) |
| Participant fees | Varies, but often ranges between 0.5% and 2% of the plan balance annually | $0.32 for every $100 in plan assets and a $5.50 quarterly administrative fee |
If you already have a Gusto account, you can read up on our 401(k) partners on the platform. And if you decide to set up a plan with one of our partner providers, our customer support team can walk you through the setup and management process.
Learn how Gusto can help with managing your retirement plan and other employee benefits by requesting a demo of our software today.
