On May 4, the Colorado House Finance Committee voted to postpone House Bill 16-1403 (the “Bill”). The postponement resulted from lawmakers’ conclusion that a compromise on several of the Bill’s provisions could not be reached during this legislative session. The Bill sought to establish the Colorado Secure Savings Plan (the “Plan”), a retirement plan for private-sector employees in the form of an automatic enrollment payroll deduction IRA. The Bill required employers with a specified number of employees in Colorado to participate in the Plan (e.g., for the Plan’s third year and thereafter, at least five employees at any time during the previous calendar year). However, employers that sponsor another retirement plan (e.g., 401(k) plans, 403(b) plans) were not going to be subject to the Bill’s requirements.
The Bill also would have established a board of trustees for the Plan, consisting of the state controller, the director of the governor’s office of state planning and budgeting, and additional trustees with certain experience who would have been appointed by the governor and confirmed by the senate. The Bill conferred fiduciary duties and numerous responsibilities on the trustees (e.g., establish investment options that offer employees returns on contributions without incurring debt or liabilities to the state, make and enter into contracts and hire staff as necessary for the Plan’s administration, conduct a periodic review of the performance of any investment vendor).
As support for the Bill, the House Finance Committee noted that “More than thirty-nine million working-age American households do not have any retirement assets. For near-retirement households, the median retirement account balance is only fourteen thousand five hundred dollars and the average working-age household has a median account balance of only two thousand five hundred dollars.” Moreover, “Coloradans are less prepared for retirement today than in previous decades, and the overwhelming majority of people in the state are concerned about their ability and their children’s ability to retire.”
Here is a link to the Bill: http://www.leg.state.co.us/clics/clics2016a/csl.nsf/billcontainers/7ABC338FBCFF4B5887257F240063FDE6/$FILE/1403_01.pdf
Future editions of The Speed Reader will likely address this topic, given that Colorado lawmakers’ goal is apparently to re-introduce similar legislation during their 2017 session.