Senator Kerry Donovan, D-Vail, and Senator Brittany Pettersen, D-Lakewood, have introduced Senate Bill 173 , which would move Colorado a major step closer to addressing the state’s looming retirement crisis.
This legislation would require a thorough analysis of the options we have as a state, including the creation The Colorado Secure Savings program. This universal, portable and automatic retirement savings plan would allow Coloradans whose employers don’t offer a retirement program to plan for the future, while simultaneously saving taxpayers money.
Nearly half of Colorado workers ages 25 to 64 don’t have access to a retirement savings plan at work. This includes eight out 10 employees of small businesses and almost nine out of 10 Coloradans in the agriculture industry. Access to adequate retirement savings helps reduce retirees’ reliance on state services like food stamps and subsidized housing, allowing that money to be utilized on other priorities.
“Most business owners want to offer retirement plans to attract top talent and develop a productive, secure workforce. But for many small businesses, it’s just too expensive in both time and money,” said Pete Turner, owner of Illegal Pete’s restaurant chain. “Seven out of 10 Colorado small businesses owners support this concept because it would help small business owners offer employees a way to save for their retirement simply by setting up a payroll deduction. It’s an extremely easy lift, even for the business trying to get established, as well as for the employees who find retirement plan navigation difficult and intimidating even with the most straightforward plan.”
The Colorado Secure Savings program could function similarly to the successful program that Oregon rolled out in 2017. Employees will be automatically enrolled in a savings plan offered by a public-private partnership in coordination with the state. Like traditional 401k plans, they would set what percentage of their wages to deduct toward retirement. Their account would then follow them from job to job, all the while having the option to raise or lower the portion that they save each month or opt-out of the program.
“It shouldn’t matter if you work two part-time jobs, run your own business, hustle as a freelancer, or have been employed by the same company for decades — hard work, no matter its form, deserves the benefits of traditional employment,” says Scott Wasserman, president of the Bell Policy Center. “For more than 750,000 Coloradans without access to a retirement plan through work, that’s not the case today. The Colorado Secure Savings Plan would provide an innovative solution for our state’s evolving workforce.”
Many aging Coloradans are facing the possibility of not being able to retire. Colorado is facing a situation where the rich are getting richer, the poor are getting poorer, and the middle class are consistently being squeezed. It’s critical that our state ensures Coloradans can provide for their families and achieve financial freedom.
“We at AARP know workers are 15 times more likely to save for retirement if the money is automatically taken out of their paychecks and deposited into an account that allows them to realize compounded interest over time,” said AARP Colorado State Director Bob Murphy. “AARP wholeheartedly supports this bill on behalf of our 680,000 members in Colorado, as well as all older adults and their families.”
“All of us want the ability to retire with security and dignity,” said Rosemary Lytle, President of the Rocky Mountain NAACP. “Too many Coloradans don’t have access to a retirement program, and this initiative would provide the resources that hard-working people need to save money and plan for their future. The Colorado Secure Savings program would not only help build a strong middle class, but it addresses some of our state’s most pressing economic justice issues.”
Small-business owners and sole proprietors will benefit from the implementation of the Colorado Secure Savings Plan as well, and states across the country are already working to pass similar legislation. It will also give employers who are currently unable to offer a retirement plan an opportunity to provide employees with that option.
“It’s a reality that most small business owners do not have the resources to provide retirement benefits for their employees. As a result, most small employers offer fewer benefits than their big business counterparts, leaving them at a disadvantage when it comes to attracting and retaining employees,” says Hunter Railey, Colorado director for Small Business Majority. “SB19-173 is the first step toward addressing this problem by exploring ways to make it easier for small businesses to compete with bigger businesses for top talent.”
The board would be consist of the State Treasurer or designee and eight additional trustees with relevant experience who would be appointed by the governor. The board would have to provide recommendations by 2020. The bill passed the Senate Finance Committee on March 13 and is currently waiting to be heard in the Senate Appropriations Committee.