Delaware has joined Colorado's interstate consortium of state-run retirement savings programs, the Colorado treasurer's office announced in a news release Dec. 11.
The move will help Delaware get its program off the ground faster than it otherwise would on its own and reduce program costs, said Ted Griffith, director of the Delaware EARNS retirement savings program, in an email.
"We accelerate our time to launch, and we achieve economies of scale near-term and short-term," Griffith said. "These economies of scale not only save money for Delaware taxpayers, but they will also allow future participants in Delaware EARNS to keep more of their investment returns through reduced administrative costs."
Delaware is the second state to join Colorado's consortium, dubbed a "partnership for a dignified retirement," following Maine, which joined in August.
The Delaware EARNS program will require employers with five or more employees to make the program available to their workers if they don't offer a workplace retirement savings program themselves. Similar to the state-facilitated programs in Maine and Colorado, it is structured as an auto IRA, meaning workers are automatically enrolled in a payroll-deduction individual retirement account.
Delaware estimates that nearly 150,000 workers in the state — many of them low- and middle-income workers — currently lack access to a workplace retirement savings plan, Griffith said.
Delaware's program is required to be in operation by Jan. 1, 2025, but now that it is part of Colorado's interstate consortium, program officials are hopeful that the program will launch much sooner.
"We are more optimistic than ever that we will meet or exceed that deadline by launching the program in mid- to late 2024," Griffith said.
Since its launch in January, the Colorado SecureSavings program has accumulated $28 million in assets, enrolled more than 13,000 employers and added 125,000 savers, a spokeswoman for the program said. Maine's MERIT retirement savings program is expected to launch broadly in early 2024.
Vestwell, in partnership with Bank of New York Mellon, serves as the program administrator for the consortium, providing record-keeping, custodial and administrative services to employers and employees in participating partner states.