The state-run retirement savings programs of Colorado and Maine have joined forces to share resources and reduce costs for their participants.
In an agreement signed on Aug. 11, the executive directors of the two state programs established a consortium operating a private-sector auto-enrollment payroll deduction IRA program. The consortium — dubbed a "partnership for a dignified retirement" — would allow participating states to "collaborate, share resources and expertise, and efficiently retain, evaluate and monitor vendors that operate the program."
Colorado, which is acting as the lead state, developed the framework to ensure smaller population states have a high-quality option for savers in their states, said Sheena Kadi, communications director and public information officer at Colorado's Department of the Treasury, in an email.
Each program will operate independently for the benefit of their state savers and will share responsibilities for governance, she said.
"I'm proud to see Colorado leading the nation on this," said Colorado State Treasurer Dave Young in a news release Wednesday. "Partnerships increase the number of Americans saving for retirement, while decreasing costs for Coloradan and American savers alike."
Colorado launched the Colorado SecureSavings Program, a state-facilitated auto IRA program, in January. Employers with five or more employees that don't offer a workplace retirement plan are required to register their employees with the Colorado program.
Since its launch, the Colorado program has registered nearly 12,000 employers and over 100,000 employees, Ms. Kadi said.
The program had just over $10.1 million in assets, as of Aug. 8, she said.
Maine will launch its auto-IRA program in early 2024. Like its Colorado counterpart, the Maine Retirement Investment Trust will require employers with five or more employees that don't offer workplace plans to register their workers in the program.
Both the Colorado and Maine retirement savings programs will automatically enroll workers at an initial 5% deferral rate, Ms. Kadi said.
Vestwell, in partnership with BNY Mellon, will serve as the program administrator for the consortium, providing record keeping, custodial and administrative services.
