Are you a small business owner or do you work for a small business with more than 5 employees? Are you or your employer facing fines for not being compliant with the Colorado Secure Savings Plan? We can help!
Businesses that are not compliant with this new law may owe $100 per employee, up to $5000 per year!
So what is it, and how can you avoid these penalties?
What is the Colorado Secure Savings Plan?
The Colorado Secure Savings Plan was established to help fill a retirement savings gap in Colorado. Almost a million workers in Colorado did not have access to a retirement savings plan through their job before this law was passed, and the plan was introduced to address this issue. It is now state-mandated that employers with 5 or more employees who don't already offer a retirement plan are legally required to offer a plan to their employees. The goal is to help more Coloradans save for retirement and have some nest egg for the future.
Details Of The Program:
The program is essentially a state-run Roth IRA savings plan, so the contributions are made with "After-tax" dollars. There is no tax write-off for the contribution, but those dollars that are invested grow tax-free! (I wrote a blog on this last year: Qualified Vs Non-Qualified Assets.)
If you are an employer, you're required to register if you have 5 or more employees, have been in business for 2 or more years, and don't already offer a qualified retirement plan like a SIMPLE IRA or 401(k).
Employees should be automatically enrolled at 5% of their pay being deducted to fund a Roth IRA.
Contributions follow employees as they change jobs.
What Are The Pros and Cons of Using a SecureSavings Plan?
Pros:
Expands retirement plan access for small-business employees.
Easy for employers—no fiduciary responsibility, no costs to set up.
Employees maintain control and portability.
- Tax advantages of a Roth IRA (after-tax contributions, tax-free growth).
Cons:
No employer match or contribution allowed.
Limited investment choices and contribution limits compared to 401(k)s.
Lower annual contribution cap ($7,000 in 2025, $8,000 if age 50+).
Additional Administrative work for employers.
What Are Some Alternative Options?
SIMPLE IRA: Somewhat of the "standard" in employer plans for smaller businesses, with lower administrative costs and ability to match and get tax deductions. Has higher contribution limits than the Colorado SecureSavings Plan ($16,500+ for 2025 vs $7000+ in Colorado SecureSavings).
401(k): Allows for flexibility and plan design options, has higher limits than a SIMPLE ($23,000+ in 2025). Generally has higher costs to administer. The "standard" for larger businesses.
SEP IRA: Great option for sole proprietors and "profit sharing" businesses. Limits up to $69,000 in 2025, no matching options, just employer contributions.
So What Now?
We know how exhausting running a small business can be - on top of every other ball you have to juggle, now you get to administer a retirement plan!
If that feels overwhelming, or you just want confirmation that you're making the right decision, we can help. Fill out our form on this page and we'll walk you through all of your options - no obligation!