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Colorado Edges Closer to Statewide Retirement Plan

A recent poll found that a majority of small business owners support creating a statewide retirement plan, saying it would help them be more competitive. (c-George/iStockphoto)
A recent poll found that a majority of small business owners support creating a statewide retirement plan, saying it would help them be more competitive. (c-George/iStockphoto)
April 24, 2017

DENVER – The biggest fear for American workers is not having enough money for retirement, and Colorado lawmakers are one step closer to launching a statewide retirement savings program.

House Bill 1290 would create a board charged with developing a strategy for offering low fee IRAs to employees who don't have workplace savings plans.

Kelli Fritts, director of advocacy for AARP Colorado, says her group supports the measure. She says setting up accounts is too expensive for many small businesses, and notes that over 750,000 Coloradans have no retirement savings through their jobs.

"Basically we want to give everybody that opportunity,” she explains. “Studies have shown that if people have a retirement savings plan at work that is auto-enrollment, they are 20 times more likely to save for retirement."

A recent poll found that a majority of small business owners support creating a statewide retirement plan, saying it would help them be more competitive.

But similar efforts have been opposed in previous sessions by banks and financial services companies, who say government shouldn't be in that business because the marketplace already offers savings products.

Rich Jones, director of policy and research for The Bell Policy Center, argues that the market isn't getting the job done. Only a third of eligible workers have IRAs, and only 15 percent actually contribute to their accounts.

Bell adds nearly two-thirds of American workers don't have enough retirement savings, so an automatic payroll savings plan could help seniors stay independent, and save taxpayer dollars.

"We know that the American public is not prepared for retirement,” he states. “If people approach retirement without sufficient savings, certainly a segment of them will be then turning to state and local governments for help, safety-net help."

HB 1290 has cleared the House, and could be heard by the Senate as early as this week. If it passes, the board of trustees' plan would still have to be approved by the legislature. Five other states have already adopted similar measures.

Eric Galatas, Public News Service - CO