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.
|State IRA Plan
|Employer Sponsored 401k
|Payroll Deduction Roth IRA
|Pre-tax, Roth AND Employer Contributions
|Limited to $7,000 (2024)
|$23,000 (plus more if over age 50)
|Enforcement penalties may apply in 2024. $100 fine per employee, up to $5,000 annually
|Compliant with state program
|18 years old and six months of employment
|Employer controls eligibility requirements
|Average asset-based fee of 0.32% plus $22 annual account paid by the employee
|Dependent on type of plan design chosen.
|Employer contributions are tax deductible
|Tax Credit Available
|Plan costs qualify for available tax credits
|5% of annual pay unless employee opts out or elects lower amount
|Auto Escalation Feature
Yes, 1% each January, up to 8%, but may opt out
|Minimum Employees to Participate
3 Funds + State Street Target Date Series
|More than 25 funds in a variety of Morningstar categories