The Centennial State has joined those providing a state-sponsored program for workers whose employers do not offer a retirement plan. Gov. Jared Polis (D) on July 14 signed into law SB20-200, a measure creating the Colorado Secure Savings Program.
The measure amends the Colorado Secure Savings Plan Act to create an IRA-based program and also creates a retirement plan coverage requirement for employers with five or more employees.
The bill moved quickly through the legislature and had the backing of heavy hitters. It was introduced in the Senate on March 9, and was sponsored by Majority Whip Kerry Donovan (D-Gunnison) and Sen. Brittany Pettersen (D-Jefferson). It passed in that chamber on June 6. The measure was introduced in the House of Representatives two days later, and was sponsored by Speaker of the House K.C. Becker (D-Boulder) and House Business Affairs & Labor Committee Chair Tracy Kraft-Tharp (D-Jefferson). It passed in the House a mere four days later.
The measure cites a need to expand retirement plan coverage in Colorado, noting that more than 900,000 working Coloradans—40% of the Colorado workforce and more than half of those in the state’s private sector—do not have access to a retirement savings account or program at work; furthermore, younger, minority and low-income workers are disproportionately affected. “The future of Colorado’s economic growth relies on our aging population having sufficient income in retirement so they can afford to live independently and have quality health care,” the preamble to the law says. “Colorado needs a remedy to the retirement security crisis so that Coloradans can look forward to a retirement free from financial anxiety or hardship.”
SB20-200 specifies that the Colorado Secure Savings Program is to be an automatic enrollment payroll deduction IRA, not a defined benefit plan. It creates the Colorado Secure Savings Program fund in the state Treasury consisting of money:
- appropriated by the General Assembly;
- transferred to the fund by the federal government;
- originating from fees and penalties related to the program; and
- given, granted or donated to the fund.
It specifies that the costs associated with the administration of the program shall be paid solely through gifts, grants and donations, and that the state treasurer may seek, accept and expend gifts, grants, and donations from private or public sources to help cover those costs.
The new law also specifies the powers and duties of the Colorado Secure Savings Board and updates the criteria the board must use in developing the program. The board is required to adopt rules regarding enrollment, contributions to and withdrawals from program accounts, the process for employer exemptions and required disclosures. And it puts in place a rule protecting privacy, stating that all individual account information for accounts under the program is confidential and may not be disclosed except under specified circumstances.