Colorado’s retirement plan mandate requires most private-sector employers with five or more employees, two or more years in business, and no qualifying retirement plan to enroll their workers in the state-run Colorado SecureSavings Program. The law came out of Senate Bill 20-200, and it applies whether you like the state program or not: your only alternatives are to offer a qualifying plan of your own or certify that you already do. Ignoring the notice is the expensive option.
Who Has to Comply
Your business is covered if all three of these are true:
- You employed at least five people at any point during the previous calendar year.
- You have been operating in Colorado for at least two years.
- You do not currently offer a qualifying employer-sponsored retirement plan.
If you check all three boxes, you must register with Colorado SecureSavings and begin facilitating payroll deductions for eligible workers.1Colorado SecureSavings. Program Details – Colorado SecureSavings Employers pay nothing to participate.2Colorado SecureSavings. Employers – Colorado SecureSavings
Compliance deadlines rolled out in phases based on employer size, and for businesses notified before January 1, 2026, those deadlines have already passed.1Colorado SecureSavings. Program Details – Colorado SecureSavings If yours slipped, register or certify your exemption now. Every additional year out of compliance adds another year of fines.
If You Already Offer a Retirement Plan
Offering a qualifying plan takes you out of the mandate, but the state still expects you to say so. You certify the exemption through the Colorado SecureSavings online portal using the access code the state mailed or emailed to your business. Lost the code, or never got one? You can request a replacement through the program website after verifying your business identity.3Colorado SecureSavings. Certify Your Business Exemption From the Program
Plans that qualify for the exemption include:
- 401(a) plans, including 401(k)
- 403(a) qualified annuity plans
- 403(b) tax-sheltered annuity plans
- 408(k) Simplified Employee Pension (SEP) plans
- 408(p) SIMPLE IRA plans
- 457(b) governmental deferred compensation plans
Businesses that fall under the size or tenure thresholds (fewer than five employees, or less than two years of operations) should also certify rather than ignore the notice. Silence looks the same as noncompliance until the state hears from you.
Registering Your Business With SecureSavings
You’ll need your Federal Employer Identification Number and the state-issued access code to log in.1Colorado SecureSavings. Program Details – Colorado SecureSavings Once inside, you add each eligible employee’s name, date of birth, contact information, and Social Security number so the program can create their accounts.
From there, the program takes over communication with your workers for 30 days. During that window, employees can opt out, adjust their contribution rate, or change their investment selections. If an employee takes no action, payroll deductions begin in the next pay cycle after the 30 days end.1Colorado SecureSavings. Program Details – Colorado SecureSavings Your ongoing job is limited to processing the deductions and remitting the money. You don’t manage investments, field account questions, or carry fiduciary liability. The program handles all of that.
Which of Your Employees Get Enrolled
An employee becomes eligible once they are at least 18 years old, earn W-2 wages in Colorado, and have been with your business for 180 days.4Colorado SecureSavings. Program Details The 180 days function as a deadline rather than a waiting period. You must enroll qualifying workers by that point, but you can add them earlier if it fits your payroll cycle better.5Colorado Secure Savings. Employee Eligibility
The same rules cover full-time, part-time, and temporary workers. Ten hours a week or fifty, it doesn’t matter, so long as the age, wage, and tenure tests are met.
What Comes Out of Employee Paychecks
Every SecureSavings account is a Roth IRA. Contributions come out of pay after taxes have been withheld, and the default deduction is 5% of gross pay. Each January, an enrolled worker’s rate automatically bumps up 1%, capped at 8%, as long as they’ve been in the program at least six months. Employees can turn off the escalation for any year, change their rate to any amount, or opt out of the program entirely at any time.6Colorado SecureSavings. Colorado SecureSavings – Contributions
The Income-Limit Trap Workers Should Know About
Roth IRAs carry income eligibility limits, and auto-enrollment doesn’t override them. For 2026, contributions phase out between $153,000 and $168,000 of modified adjusted gross income for single filers, and between $242,000 and $252,000 for married couples filing jointly. Above the top of either range, no Roth contribution is allowed at all.7Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs
The program does not screen for income. If a high earner stays enrolled anyway, the payroll deductions become excess contributions and the IRS assesses a 6% penalty on the excess for every year it sits in the account. Higher-income employees who receive an enrollment notice should opt out promptly or talk to a tax professional about correcting excess contributions before the filing deadline. This is worth flagging to your workforce because the mandate itself won’t.
Penalties for Skipping the Mandate
Colorado builds in warning time before fining anyone. Before any penalty applies, the state must issue a formal notice of noncompliance, and at least three months must pass after that notice. Fines also cannot begin until at least one year after the employer was scheduled to enter the program.8Justia Law. Colorado Code 24-54.3-107 – Colorado Secure Savings Program – Rules
Once that grace period ends, the fine is up to $100 per eligible employee for every year the business stays out of compliance, capped at $5,000 per calendar year regardless of company size.8Justia Law. Colorado Code 24-54.3-107 – Colorado Secure Savings Program – Rules Penalties fall on the business, not the owner or manager personally. A company with 50 eligible employees would hit the $5,000 ceiling. A company with 20 would face $2,000 a year. Because registration is free, there’s no financial reason to accept either bill.
Starting Your Own Plan Instead
Setting up a 401(k) or SIMPLE IRA satisfies the mandate and can be surprisingly affordable thanks to federal SECURE 2.0 Act credits.
Employers with 50 or fewer employees can claim a startup-cost credit covering 100% of eligible costs for the first three years, up to the greater of $500 or $250 per eligible employee, with a $5,000 annual ceiling. Employers with 51 to 100 employees get the same structure at 50% of costs.9Internal Revenue Service. Retirement Plans Startup Costs Tax Credit
A separate credit rewards employer contributions to the new plan. You can claim up to $1,000 per participating employee. For businesses with 50 or fewer workers, the credit covers 100% of those contributions in the first two plan years, then scales to 75% in year three, 50% in year four, and 25% in year five. It does not apply to employees earning more than $110,000 in 2026.7Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs Stacked together, the credits can cover most of what it costs a small business to launch and fund a plan for the first several years, and offering one takes you out of the SecureSavings mandate.