Montpelier, VT – Treasurer Pieciak announced that Vermont has selected Colorado as a partner state to help establish the state’s public retirement program, VT Saves. Vermont and Colorado will now negotiate a partnership agreement, and once established, the partnership will put VT Saves on track to launch by the end of the year, providing tens of thousands of Vermonters access to a workplace retirement plan faster than anticipated.
“Partnering with Colorado will lower costs, help achieve better returns, and position VT Saves to launch sooner,” said Treasurer Pieciak. “Many Vermont workers without a retirement plan are not saving a penny for retirement. This partnership will be an important step forward in expanding retirement coverage and supporting financial equity in our state. I appreciate the leadership of my colleague Treasurer Dave Young who is demonstrating the value that can be achieved by states working together.”
Last year Colorado launched Colorado SecureSavings, an auto-IRA retirement savings program similar to VT Saves. In the first 14 months of Colorado SecureSavings, over 14,000 employers enrolled in the program, accumulating more than $50 million of assets under management, and supporting a more secure retirement tens of thousands of Coloradans. Maine and Delaware have also partnered with Colorado forming an interstate consortium of state-run retirement savings programs intended to reduce costs to users and improve efficiencies.
"The Colorado SecureSavings Program is delighted to enter into negotiations with Vermont and welcomes the expansion of the Partnership for a Dignified Retirement. This will help pave the way for more savers across the country to prepare for retirement, and to retire with confidence. We are looking forward to working with Treasurer Mike Pieciak and his team," said Dave Young, Colorado State Treasurer.
VT Saves is an auto-IRA retirement savings plan that will be available for Vermonters who are not currently offered a retirement plan through their employer. The program became law last year in a unanimous vote, adding Vermont to a growing list of states that have enacted a public auto-IRA program. At no cost to employers and no ongoing cost to taxpayers, VT Saves is designed to make saving for retirement easy and automatic.
Employers with five or more employees who do not already offer a retirement plan will be required to sign up for VT Saves, and their employees who do not opt-out of the program will automatically have a Roth IRA established with payroll deductions. Employees can opt out of the program at any time and always have access to any principal they put in without tax or penalties.
Just as Vermont’s participation in the STABLE partnership offers ABLE accounts to Vermonters, the VT Saves partnership with Colorado will expand total assets under management, leading to increased returns through economies of scale and reduced costs.
As of January 2024, 15 states have enacted auto-IRA programs for private sector workers who lack a workplace retirement plan. Results have shown that 70% to 75% of eligible employees participate in the program with average annual contributions of approximately $2,000. A recent AARP study found that, over time, programs like VT Saves will increase household wealth for BIPOC employees by roughly 100%, depending on the worker’s age.
You can learn more about VT Saves here.
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