What’s Working: How Colorado’s mandatory retirement plan is working out
Until recently, Eden Parker’s retirement plan was probably similar to most service workers: Work till she drops and one day move in with one of her kids.
“I’m not inheriting anything and my family doesn’t have any money,” said Parker, a manager at Blue Bonnet Cafe who has worked at the Denver restaurant for 30 years. “I have kids and I’m like, ‘I’m going to have to sleep in your basement.’ I don’t know. That’s so sad.”
She said that with a little laugh because she’s in a better state now than two years ago. When her employer signed up for Colorado’s SecureSavings pilot program, Parker, now 54, jumped at the opportunity to open a retirement account. In less than two years, she’s saved up about $10,000 — or $10,000 more than she’s been able to save in her life.
Parker is one of roughly 68,500 workers in Colorado who have squirreled away $94 million into SecureSavings since the program launched in early 2023. The program, for workers whose employers didn’t offer a retirement plan, was set up by the state but administered by professional fund managers. Another 20,000 Colorado workers are in the pipeline, according to program administrators.
For Parker, the savings are automatic. She set her account to save 1% each post-tax paycheck, a rate that just increased to 2% as part of an annual trigger to get her gradually saving more. She has no idea how much of that $10,000 is from stock market returns or from her paycheck contribution. But if it was just her paycheck, she’d need to make $500,000 a year, according to What’s Working math1 (and that, she’s not). It’s been a good year in the stock market with one-year returns for the various SecureSavings funds between 5.1% and 23.55%, as of Nov. 30.
“I think a lot of us aren’t really financially literate. We don’t know how it works. We don’t know what is possible. It just hasn’t been something that’s offered to us,” Parker said. “Honestly, it’s more than I had before. I’m glad it’s there. I feel a little more secure, like I might retire in 15 years and then if I do, I’d have a little something.”
Colorado SecureSavings
Approximately 68,500 workers are now saving for retirement in the two years that the state mandated program went into effect. More stats, as of Nov. 12, 2024:
$94 million — Value of assets saved by workers
$1,395 — Avg. account balance
5.18% — Avg. contribution rate
$179 — Avg. monthly contribution
$40,000-$50,000 — Avg annual income of workers
62% of savers are 45 years or younger
The program could grow even more next year as officials become stricter with compliance. Back in 2020 when lawmakers passed Senate Bill 200 to implement SecureSavings, studies showed that more than 1 million Colorado workers had no retirement plan. Helping them get started with saving money for retirement was projected to offset billions of dollars in financial impact to the state. At the time, an estimated 115,000 private employers were projected to enroll.
But to date, only about 16,000 employers have registered. And that original 115,000 estimate is believed to be much lower because of data-quality issues with existing businesses.
Hunter Railey, director of SecureSavings, said it’s still early. He’s been working with the state labor department to identify eligible employers in business today. The state has sent notices to 95,300 businesses so far. As of this week, 15,530 companies have registered and 33,401 are exempt. Companies can get an exemption if they employ fewer than five workers, are less than two years old, or already offer an employee retirement plan.
There’s no cost for employers but they need to take the effort to connect their payroll systems to SecureSavings so that workers’ contributions can be deducted automatically. While notices have been sent out regularly all year, the department plans to start issuing fines to companies out of compliance starting next fiscal year.
“From a compliance standpoint, we understand it’s a big change but we would rather you register, enroll and facilitate retirement than to have us issue penalties,” Railey said. “That’s the mentality we’re taking.”
Savings for some, not for all
Overall, advocates feel SecureSavings is doing its job getting more people into saving money for retirement.
“It’s as we had hoped,” said Andrea Kuwik, director of policy and resarch at Bell Policy Center, a progressive organization that advocates for financial stability and supported the law to create the program.
But the program hasn’t quite worked for everyone — even at Blue Bonnet Cafe, where general manager Chris Strowmatt has been a big fan since the start. Of the restaurant’s 49 employees, 22 are enrolled in SecureSavings. The rest opted out.
“They need every penny on their paycheck,” Strowmatt said. “Most everybody here lives paycheck to paycheck. So when you sign up, you’re going to lose part of your paycheck. But it’s not like you’re losing it. You’re just redistributing it. But some people are not in the position to be able to do that.”
Median hourly wages for many untipped restaurant workers in Colorado is less than $20 an hour, though chefs and head cooks earn a median of $30.51, according to Colorado labor data. SecureSavings is also a Roth IRA, so employee contributions are post tax (the tax benefit comes at withdrawal). That leaves a smaller amount of take-home pay for participants, especially restaurant workers.
“We’ve heard from members that many of their employees are opting out of Colorado SecureSavings, even though most restaurant owners do not offer their own private retirement plans,” said Sonia Riggs, president and CEO of the Colorado Restaurant Association. “It’s also an administrative headache for an industry facing far too many challenges right now.”
Kuwik acknowledged the challenges and said that a retirement plan needs to be just one piece of a multilayered effort to help all workers be able to live and work in the state.
“The reality of living in a lot of places in Colorado is that the amount of money that you are making is not enough to make ends meet,” Kuwik said. “I think the question is how can we also work to increase other social supports? How can we make rent more affordable? How can we also increase things like minimum wage and make child care more affordable? All of those things are collectively being worked on because it is so important to make sure people can actually save for retirement and meaningfully put money away.”
Take the poll: Ready for retirement?
What does it take to save up enough for retirement? For some, an employer who offers a plan. Now, with the state’s SecureSavings program, most workers have access to one.
But how much do you need or think you need to retire? Take the latest What’s Working poll and share a comment to help us better understand what’s going on in Colorado. ➔ cosun.co/WWretire24
Denver-area inflation rises to 2%
Higher food prices but lower gasoline costs pushed the Consumer Price Index for the Denver region up 2% compared with November 2023, according to the latest Bureau of Labor Statistics report. That’s right where the Federal Reserve wants annual inflation to be, and it comes in lower than the U.S. rate of 2.7%
While Denver had one of the lowest inflation increases in the U.S., the November prices are up since September. The biggest spikes in prices in the past two months? Dairy products and nonalcoholic beverages.
Related: Regular gas in Colorado averaged $2.87 a gallon on Thursday, down 21 cents from a month ago but up from $2.83 a year ago. >> AAA Colorado prices
ICYMI ➔ Colorado experts predict what the state’s economy will look like in 2025. The Colorado Business Economic Outlook shares its 60th annual report >> Read story, see data
Sun economy stories you may have missed
➔ Safeway owner breaks off merger with Kroger which would have impacted 105 grocery stores in Colorado. A federal judge had halted the $24.6 billion merger a day earlier, leaving Colorado’s own antitrust case waiting for a decision that may now be moot. >> Read story
➔ How do you launch a career as a young artist? Paid programs in Colorado want to help. >> Read story
➔ A 138-year-old Colorado newspaper asked readers if it was worth saving. They resoundingly said yes. The Plainsman Herald owner Kent Brooks originally planned to halt the Springfield weekly within weeks >> Read story
➔ Consultants hired by Chevron, other large producers falsified oil and gas data, Colorado regulators say. Colorado Energy and Carbon Management Commission says apparent fraud by two local companies “merits criminal investigation” >> Read story
➔ “You are here to serve”: As Colorado’s pension costs grow, some PERA members say its board isn’t listening. Critics say the Board of Trustees that oversees the Colorado Public Employees’ Retirement Association has isolated itself from the general public and the members it was created to serve >> Read story
➔ Can eye transplants cure blindness? Colorado doctors just got $46M in federal funding to find out. A contract with the federal agency ARPA-H for up to $46 million could help doctors and scientists at the University of Colorado Anschutz become the first to successfully transplant an eye >> Read story
Other working bits
➔ Satellite company awarded $1.9M tax credit to expand to Littleton. Originally headquartered in Silicon Valley, satellite manufacturer Astro Digital switched its address to Littleton, where 15 employees now work. The company was approved this week for a Job Growth Incentive Tax Credit from the state’s Economic Development Commission. The tax credits kick in as Astro Digital adds up to 141 net new jobs with an average wage of $126,589. The company said it plans to add 40 more workers in Colorado next year. >> More
➔ Sodium-ion battery developer expanding in Broomfield. Renewable energy company Peak Energy picked Colorado to build a battery-cell engineering center in Broomfield to develop sodium-ion battery cells for use in storage systems. The startup, which raised $55 million in venture investment in July, hopes to start manufacturing by 2027 and create new jobs for engineers, cell researchers and manufacturing technicians. The company currently employs 60, including 13 in Colorado.
➔ 78 employees at homeless organization file to unionize. The Dec. 9 petition was filed by workers in its residential services and Housing First Department at Colorado Coalition for the Homeless elicited this response from management at the 850-employee organization: “We want to ensure that all employees are fully informed and have a direct say in how they are represented and are encouraging team members to familiarize themselves with the process and potential impacts of union representation and any subsequent processes and negotiations as they weigh whether to support a union,” according to a CCH statement.
➔ Denver job-training group gets $500,000 EPA grant. The nonprofit Groundwork Denver received a second Brownfields job training grant from the U.S. Environmental Protection Agency. The first came in 2021, which the group used to pilot GRIT, the GReen Infrastructure Training program for young adults looking to get into environmental careers. The new half-million Brownfields grant will be used for an environmental job training program in the cities of Denver and Sheridan. The local nonprofit was one of several recipients for the award. >> Details
➔ Homebuilder partners with CHFA for first-time homebuyer program. A new pilot program by Oakwood Homes and the Colorado Housing and Finance Authority has the builder buying down the interest rates for first-time buyers to help them get into an Oakwood home of their own. CHFA also provides financial aid that’s up to $25,000 in down-payment assistance. There are income limits and lots of restrictions but it’s one way a local builder is trying to find more buyers in a tough market. >> Details
Got some economic news or business bits Coloradans should know? Tell us: cosun.co/heyww
Thanks for rejoining me this week after a few weeks off — cough, cough. I’m feeling better and will continue to work on economic stories through the end of the year. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara
Miss a column? Catch up:
What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.
Support this free newsletter and become a Colorado Sun member: coloradosun.com/join
Corrections & Clarifications
Notice something wrong? The Colorado Sun has an ethical responsibility to fix all factual errors. Request a correction by emailing corrections@coloradosun.com.
- To get to $10,000 in two years by saving 1% of one’s monthly paycheck, a person needs to set aside $416 a month:
$10,000/24 months = $416And if $416 is 1% of their paycheck, the person would need to earn $41,667 a month:
IF 0.01×(monthly salary) = $416.67
THEN monthly salary = $416.67/0.01 = $41,667 per monthOr $500,004 a year:
$41,667 x 12 months = $500,004 a year
↩︎