March 1, 2023
Colorado SecureSavings State Mandate Deadlines are Approaching
How the state program works and why you should encourage employers to offer an alternative.
All Colorado employers are required by law to either enroll their employees in the Colorado SecureSavings (link Colorado SecureSavings to https://coloradosecuresavings.com/employers/program-details) program if they do not currently have an employee retirement plan in place, or create a retirement plan of their own.
Qualified plans are retirement plans that qualify under the Internal Revenue Code 401(a). Examples include a Simplified Employee Pension (SEP IRA), a SIMPLE IRA, a 401(k), 403(b) if a non-profit, or 457(b) for governmental plans. These types of plans can be used by an employer to satisfy the Colorado state mandate for employer retirement plans.
Important 2023 due dates for Colorado SecureSavings
- March 15 – Employers with 50 or more employees
- May 15 – Employers with 15 to 49 employees
- June 30 – Employers with 5 to 14 employees
Employers could face a penalty for non-compliance, such as failure to enroll eligible employees, of $100 per employee per year, up to a maximum of $5,000 annually. They can avoid penalty by opening their own retirement plan that better fits their needs and those of their employees.
How Colorado SecureSavings works
All eligible Employees are auto-enrolled by their employer with an automatic 5% of compensation withholding that auto-increases at 1% per year up to 8%. Employees can opt out after being enrolled if they do not wish to participate. Employer is responsible for enrollment and for processing payroll deducted contributions for each employee.
The cost to employees for participation in Colorado SecureSavings includes an annual account fee of $22. And depending on which investment option is chosen by the employee an annual asset-based fee ranging from 0.225% to 0.32% is applied to the total value of assets held by the employee in the plan.
Why should employers consider offering a retirement plan with National Life Group?
- Attract and retain employees – offering your employees an alternative retirement plan to Colorado SecureSavings gives your employees more flexibility, the support of a dedicated National Life Agent and you the ability to take advantage of tax credits that the SecureSavings plan cannot offer.
- $15,000 tax credit – For small businesses with up to 50 employees, SECURE 2.0 Act of 2022 increases the tax credit from 50% to 100% of the retirement plan start-up costs that an employer may incur. The tax credit is capped annually at $5,000 per employer, for each of the first three years that the new retirement plan is offered.
- Tax credit for business owners with up to 100 employees a potential tax credit for matching employee contributions. The credit caps at $1,000 per employee and phases out over a five-year period. Employers with 51 to 100 employees may have further reductions to the credit amount.
- Starting in 2024 employers will be able to match employee student loan payments with matching payments to a SIMPLE IRA, 401(k) or 403(b), another great tool for employers to attract new employees or retain employees.
Want to learn more? Access the IRA Agent e-Kit here
