Colorado began phasing businesses into the Colorado Secure Savings Program in 2023.
It requires all Colorado businesses with 5 or more employees who have been in business for at least 2 years to participate unless they have an employer-sponsored retirement plan in place. Employers with 5 or more employees must have registered or provided an exemption to the program by June 30, 2023. The chart below illustrates a brief summary of the program.
| Feature | State IRA Plan | Employer Sponsored 401k |
| Plan Type | Payroll Deduction Roth IRA | Pre-tax, Roth AND Employer Contributions |
| Contribution Limits | Limited to $7,000 (2024) | $23,000 (plus more if over age 50) |
| Compliance | Enforcement penalties may apply in 2024. $100 fine per employee, up to $5,000 annually | Compliant with state program |
| Eligibility | 18 years old and six months of employment | Employer controls eligibility requirements |
| Plan Costs | Average asset-based fee of 0.32% plus $22 annual account paid by the employee | Dependent on type of plan design chosen. |
| Tax Deductible | NO | Employer contributions are tax deductible |
| Tax Credit Available | NO | Plan costs qualify for available tax credits |
| Default Contribution | 5% of annual pay unless employee opts out or elects lower amount | Employee choice |
| Auto Escalation Feature |
Yes, 1% each January, up to 8%, but may opt out
|
NO |
| Minimum Employees to Participate |
5 |
Any Number |
| Investments |
3 Funds + State Street Target Date Series |
More than 25 funds in a variety of Morningstar categories |
