Colorado, Maine Partner on Auto Retirement Savings Program

Maine will partner with Colorado on its already established state-sponsored automatic retirement savings program for private-sector workers to provide the smaller state of Maine with a ready-made plan while reducing costs for both programs, the states announced Tuesday.

The Maine Retirement Investment Trust will join the already existing Colorado Secure Savings Program’s automatic workplace retirement savings program for the first such partnership in the country, according to the announcement. Small plan provider Vestwell is the administrator, in partnership with BNY Mellon, for the savings program that will now serve both states.

“I’m proud to see Colorado leading the nation on this,” said Colorado Treasurer Dave Young in a statement. “Partnerships increase the number of Americans saving for retirement, while decreasing fees….[and] helping states with smaller populations offer a cost-friendly, state-run retirement program option for workers who don’t have access to one at work.”

Each program will operate independently, but share responsibilities for governance, a Colorado spokesperson wrote in an emailed response.

“Each will benefit from the economies of scale, including lower costs for participants,” she said. “Colorado is the lead state, and developed this framework to ensure smaller population states have a high quality option for savers in their states, while reducing costs for Colorado and Maine savers.”

Colorado’s state legislature mandated retirement plan uptake in 2020, with the state-sponsored program available to employers starting this year. Maine’s legislature passed its retirement plan mandate in 2021, with its state-sponsored plan being available in January 2024. The retirement plan is tied to the employee, not the employer, so it is portable should a worker change jobs.

More than 200,000 Maine workers do not have access to retirement savings through their workplace, according to data from the state. The state’s MERIT program, if provided by an employer, will automatically enroll employees in a Roth IRA account unless they opt out.

“Workers in every state want a free and easy way to save so they can retire with dignity,” said Maine Treasurer Henry Beck in a statement. “Partnering with Colorado we will share costs, create scale, and tailor a retirement savings program to meet the needs of Mainers.”

The Colorado plan currently has 12,000 employers signed up and almost $12 million in assets, with a deadline of December 31 for businesses to decide to either offer an employer-sponsored plan or enroll in the state’s plan. The states did not provide details of how much participants will save from the partnership.

Maine employers with five or more workers must offer a qualified retirement savings plan, including the state’s MERIT program, for their employees beginning in January 2024.

The two states signed the Interstate Adhesion Agreement on August 11, according to the announcement, which they said is the first of its kind in the nation.

In 2021, Colorado announced a multi-state IRA program with New Mexico to share program administration duties and fees, according to an announcement at the time. That program, however, is pending amendments by New Mexico’s legislature ahead of implementation, according to the Colorado spokesperson.

“We will gladly partner with New Mexico once it is,” implemented, the spokesperson wrote via email.