Vestwell announced this week it has won a competitive bid to administer the first multi-state auto-IRA program, made up of the Colorado Secure Savings Program and New Mexico Work and $ave auto-enroll IRA programs.
Colorado and New Mexico recently created a historic partnership, signing a Memorandum of Cooperation (MoC) for their auto-enroll IRA programs. Through this partnership, an estimated one million private-sector workers in Colorado and 430,000 in New Mexico will now have access to a retirement plan through their employer.
The Colorado Secure Savings Program and New Mexico Work and $ave programs will also provide increased accessibility for part-time, self-employed, and seasonal workers. The MoC allows individuals that live near the border and work in both states the ability to hold their retirement savings across state borders. Small business owners will be able to sign up for these programs at no cost to the employer.
“Colorado and New Mexico are pioneering the next phase in retirement savings through cross-state partnerships, bringing dignified savings solutions their workforce deserves.”
Aaron Schumm, Vestwell
“We are proud to power the first-ever, multi-state auto-IRA program in the country,” said Aaron Schumm, Founder and CEO of Vestwell. “Colorado and New Mexico are pioneering the next phase in retirement savings through cross-state partnerships, bringing dignified savings solutions their workforce deserves.”
Vestwell, in partnership with BNY Mellon, will serve as the Program Administrator, providing recordkeeping, custodial, and administrative services to employers and employees in Colorado and New Mexico. Vestwell now administers three of the five live state-facilitated retirement savings programs: Oregon, Maryland, and Connecticut. Across all its business, Vestwell currently powers nearly 25,000 small businesses, a million savers, and $25 billion in assets in all 50 states.
“We are thrilled to be working with Vestwell, who has extensive experience expanding retirement savings through innovative solutions,” said Dave Young, Colorado State Treasurer. “This is a significant step towards providing Colorado employers and workers with the opportunity to save for a dignified and sustainable retirement.”
“Vestwell has a proven track record of providing high-quality retirement solutions to state facilitated programs, said Hunter Railey, Director, Colorado Secure Savings Program. “As Colorado prepares to implement the Secure Savings Program, employers and workers will have some of the best services available to support their long-term financial security.”
Colorado Secure Savings Program is expected to impact more than 40% of the state’s workforce. Nearly one million employees will now have access to an employer-sponsored retirement plan. Colorado businesses with five or more employees that have been in business for over two years, will be required to offer a workplace retirement plan, either through Colorado Secure Savings Program or through a traditional 401k plan. The pilot program is expected to begin in October 2022 and enrollment will begin in 2023.
“New Mexico appreciates the opportunity to work in such a collaborative environment to bring a high-quality retirement option to our employers and workers,” said Tim Eichenberg, New Mexico State Treasurer. “The expertise and experience Vestwell brings is a huge asset to our work to expand retirement savings.”
New Mexico Work and $ave will support 62% of New Mexico private-sector employees who do not have a retirement plan through their employer. This will be a hybrid program consisting of a voluntary IRA and web marketplace. The marketplace options will be determined by the state Board. All companies, regardless of size, with their primary place of business located in New Mexico will be eligible to participate. The New Mexico Work and $ave program is expected to launch on July 1, 2024.
SEE ALSO:
• Colorado, New Mexico First to Partner on State-Run IRA Program
• Connecticut Launches State-Run Retirement Savings Program