Beginning in 2023, Employers that Do Not Offer Retirement Plan Benefits Must Help Facilitate Colorado’s SecureSavings Program for Their Employees

Ashley Graves, Law Clerk

            Beginning in 2023, Colorado will be rolling out its new SecureSavings program – created by the State Treasurer to provide an option for employees to save for retirement when their employers do not offer a retirement plan as an employment benefit.  Under the program, all Colorado employers that have been in business for two or more years, have five or more employees, and do not offer a retirement savings plan as a benefit must participate in the program by providing employees the opportunity to contribute to a Roth IRA maintained by the SecureSavings program through payroll deductions.  Employers are not required to match any employee contributions to the state program, or otherwise expend out-of-pocket costs towards the program.

  Employees over eighteen years old that have earned wages in Colorado for at least 180 days are eligible and will be automatically enrolled in the program (provided their employer does not already provide qualifying retirement benefits).  However, employees will have thirty days to either opt out of the program or customize their contribution amounts, investment options, and beneficiaries.  Employees who do not opt out within thirty days of their enrollment date will automatically have five percent of their compensation withheld on an after-tax basis.  Additionally, each January, contributions will automatically increase by one percent to a maximum of eight percent (unless otherwise adjusted by the employee).

             Employers should expect to receive a notice from the State to register with Colorado SecureSavings, and employers that already have qualified retirement plans in place for employees may certify their exemption from the program as part of the registration process.  Otherwise, non-exempt employers must provide to the program their payroll vendor’s name (if any), payroll schedule, company bank information, employer contact information, and an employee roster.  Employees identified on the roster will automatically be enrolled in the SecureSavings program and will have thirty days to opt out or modify their plan.  Participating employers will be obligated to conduct payroll deductions on behalf of those employees who do not opt out of the program.  Employees hired after the registration date must be enrolled in the program within 180 days of their hire dates.  Contributions made to the program do not need to be included on an employee’s W-2.

 Key Considerations and Deadlines for Employers

            Employers subject to the SecureSavings program will need to update participating employees’ contribution rates within their payroll system to ensure that contributions are properly withheld and transmitted.  Contributions must begin with the payroll immediately following the opt-out period.  Employers are also obligated to keep employee rosters and payroll contribution information updated.  Employers should not provide any advice about the program or investments and should instead advise employees to visit ColoradoSecureSavings.com or call 1-844-711-5001.[1]  Further, employers are prohibited from providing tax, legal, or other financial advice regarding employee accounts.  Last, the deadline to register or apply for an exemption varies depending on the size of the employer.  Employers with 50 or more employees have until March 15, 2023; employers with over 15 but less than 49 employees have until May 15, 2023; and employers with less than 14 but over 5 employees have until June 30, 2023 to register. 

Please feel free to reach out to Campbell Litigation with any questions or concerns you may have about the SecureSavings program and obligations under the same.

[1] https://coloradosecuresavings.com/faqs/what-if-an-employee-asks-me-for-advice-about-the-program-or-its-investment-options