Colorado SecureSavings: A Convenient Retirement Savings Program for Employers and Employees

In Colorado, more than 40% of the private-sector workforce lacks access to a retirement savings plan at work, totaling nearly 940,000 workers. To address this gap, the state of Colorado introduced the Colorado SecureSavings program. In this blog post, we’ll explore the key aspects of this program, its benefits for both employers and employees and how it differs from traditional retirement plans.

What Is Colorado SecureSavings?

Colorado SecureSavings is a state-facilitated retirement savings program designed to help workers save for their future. Here are some essential details:

Eligibility: All eligible employers in Colorado can participate in the program.

Employee Participation: Employees can contribute to a Roth Individual Retirement Account (IRA) through payroll deductions.

Portability: The account remains portable even if employees change jobs or leave their current position.

Employer Responsibilities

Mandatory Offering

Under Colorado law, employers must offer some form of retirement savings to their employees. This can include:

• Traditional pensions
• 401(k) plans
• 403(b) plans
• SEP Plans
• SIMPLE IRA plans
• Governmental deferred compensation plans
• Colorado SecureSavings accounts

No Employer Fees

Participating employers do not incur any fees. Additionally, employers are neither required nor permitted to match employee contributions to the program.

Exemption for Qualified Retirement Plans

Employers who already offer a qualified retirement plan (such as a 401(k) can certify exemption from the Colorado SecureSavings program.

How Colorado SecureSavings Differs

Simplicity and Cost-Effectiveness

Unlike many traditional plans, Colorado SecureSavings minimizes administrative complexity, fiduciary liability, and high costs. Employers can focus on facilitating the program without additional burdens.

Not a Replacement for 401(k)s

Colorado SecureSavings does not replace or compete with existing 401(k) plans. Employers can continue offering their qualified retirement plans alongside this program.

Benefits for Employers

Attract and Retain Talent: Offering retirement savings helps attract and retain quality employees.

Minimal Administrative Burden: Colorado SecureSavings is manageable for small businesses.

No Fees: Employers can provide this benefit without incurring any costs.

How Colorado SecureSavings Helps Your Employees

Colorado SecureSavings aims to make retirement savings accessible and convenient for employees. Here’s how it benefits your workforce:

1. Automatic Enrollment: Employees are automatically enrolled in the program through payroll deductions. This ensures consistent contributions without requiring active participation from employees.
2. Opt-Out Option: While automatic enrollment encourages participation, employees can choose to opt-out if they prefer an alternative savings method or have existing retirement arrangements.

PEOs and 401(k) Plans

Can PEOs Offer 401(k) Plans?

Yes, PEOs (Professional Employer Organizations) can facilitate 401(k) plans for your business. Here’s why this partnership can be advantageous:

1. Cost-Effectiveness: The more participants in your 401(k) plan, the lower the fees. By joining forces with a PEO, you benefit from economies of scale, reducing overall plan costs.
2. Fiduciary Liability Transfer: As a plan sponsor, you have fiduciary responsibilities under ERISA (Employee Retirement Income Security Act). When you work with a PEO, they assume fiduciary liability, ensuring compliance and protecting your interests.

What to Expect from PEO 401(k) Plans

1. Co-Sponsorship: You and your employees become part of the PEO’s 401(k) plan. The PEO acts as a co-sponsor, streamlining administration and reducing costs.
2. Liability Management: The PEO handles investment-related duties, administrative tasks, and timely employee contributions. They also maintain ERISA fidelity bond coverage and select service providers.
3. Reduced Administrative Burden: As a co-sponsor, the PEO manages plan audits and other administrative aspects. This frees up your time to focus on strategic business initiatives.
4. Cost Savings: Plan audits, especially for businesses with over 100 eligible participants, can be expensive. Partnering with a PEO provides both time and cost savings.

Conclusion

Colorado SecureSavings bridges the retirement savings gap for Colorado workers. By participating, employers contribute to their employees’ financial well-being while enjoying a straightforward and cost-effective solution. Explore Colorado SecureSavings today and empower your workforce for a stronger financial future.

A Strategic Move

Partnering with a PEO allows you to offer a quality and affordable 401(k) plan to your employees. Qualified HR experts handle the complexities, ensuring compliance and minimizing your administrative workload.

With over 600 PEO companies, how do you choose? As your dedicated PEO broker, we take a holistic approach to finding the right PEO partner for your business, helping you maximize your savings potential and avoid any undue risks.

Ready to optimize your worker's comp, and employee benefit plans and streamline your HR processes? Contact [email protected] today for personalized assistance or schedule a chat with us.

Visit PEOfortheCEO.com to learn more.