In an effort to save taxpayers money over the next 15 years and aid in retirement savings for employees in private sector businesses and gig workers, the Colorado SecureSavings Program began Wednesday.
Colorado Department of Treasury officials launched the new website and it's now open for applicants.
The program will provide retirement plan access for up to 1 million individuals in the state, according to a news release.
The goal of the program is to ensure that people can build a long-term financial well being and has no cost for private sector employers. It includes support for part-time, self-employed or seasonal workers and is tied to the employee rather than the business. That means the plan can travel with them.
Businesses will be able to enroll in waves, with one enrollment on May 15 and the next on June 15.
BlackRock and State Street Global Advisors will serve as the investment managers for the program. Vestwell Holdings, Inc. serves as the program administrator.
Treasury officials conducted four research projects, according to Treasurer Dave Young. It found that 40% of the private sector workforce does not have access to workplace retirement savings plans.
Estimates show the program could save approximately $18 billion for taxpayers over the next 15 years since it could curb of use of aid and assistance programs for those who outlive their savings.
“The sad reality is that people don’t have retirement savings to supplement Social Security,” Young said in an interview with The Denver Gazette. “When they get to retirement age two things happen: One is, either they don’t have enough savings and they can’t retire so they keep having to work, or if they just can’t continue to work ... they end up on safety net services because they don’t have enough savings to supplement Social Security to live a dignified retirement.”
During the pandemic, it became clear that people had struggled to save money over the long term for significant and unpredictable events, he said. With inflation and the potential of a recession in the near future it is still important to find a way to budget for savings.
“People didn’t have savings when businesses started to shutter. People lost their jobs. They didn’t have that cushion to help them through,” Young said. “So my mantra has always been ‘there’s no day like today to start saving.'”
Prior to the start of a Wednesday press conference to launch the program, there was a pilot with 15 participating businesses. Some spoke about their experiences at the press conference.
“We value a collaborative work environment that focuses on retaining staff and helping them grow and develop with us,” Holly Adinoff, General Manager of Sullivan Scrap Kitchen and pilot participant, said in a press release. “We were excited to participate in the pilot program, especially since it’s free and easy for us to use.”
“This is a very user-friendly website, it was really easy to navigate and figure things out…Honestly this has been such a good experience, just from the administrator side which is almost never the case…This is going to be a very positive thing,” human resources director and pilot participant Courtney Imhoff said in a press release.
“This is budget neutral for the state of Colorado," Young said.