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Colorado Secure Savings Program

Almost a million working Coloradans have no access to an employer-sponsored retirement savings plan. The state of Colorado is about to bring that number down — dramatically.

Starting later this year, eligible employees will be automatically enrolled in the Colorado Secure Savings Program: a state-sponsored individual retirement account (IRA) plan. And if you’re a Colorado employer with more than five (5) employees, you’re a covered employerIf, during the last two (2) years, you’ve already sponsored a qualified retirement plan (QRP), not much will seem to change.*

If you don’t already sponsor a QRP, though, you’ll have to ensure that your payroll system is set up to accommodate the new program. If you don’t, you could be liable for fines of up to $5000 for every year you don’t comply.

All that work might seem daunting at first, especially for a small business owner. But there is a way to turn an obligation into an opportunityA quality retirement program is the most effective tool there is for the recruitment and retention of employee talent. Though the state-sponsored IRA program may be the default option for your business, it may not be the most attractive option for your employees. Now is the time when Colorado employers should be think about more than compliance — they should be thinking about ways they can use this moment to reassess their the competitiveness of their benefits.

Employer-sponsored 401(k)s have several significant advantages over IRAs. Employees can make higher annual contributions to a 401(k); and 401(k)s offer a much wider range of investment options. With  401(k)s, employers have more freedom to design a customized plan that truly addresses the unique needs of their employees. (And they enjoy a much higher tax benefit than the state-sponsored IRA.)

There are a lot of choices to sort through, but the right decision can make a big difference in the health of your business. And SMA can help you make it. With decades of expertise under our belts, we can help you devise and implement a retirement plan that works for both you and your employees. Call us today at 901-355-2559, or email us at tpa@sma.org, to find out more about how we can help.

It’s a new day for employees in Colorado; let it be a new day for your business as well.

*Compliant QRPs include: 401(a), 401(k), or 403(a) plans; a 403(b) tax-sheltered annuity plan; a 457(b) deferred compensation plan; a simplified employee pension (SEP) plan; or a SIMPLE 401(k) or IRA plan.