Colorado Secure Savings: Off and Running

What’s one year old and has 40,000 new savers? You guessed it – it’s Colorado’s Secure Choice retirement savings program. We caught up with Treasurer Dave Young and Executive Director Hunter Railey to get the latest news from the Rocky Mountain State. Keen observations, innovation, and some sage advice ahead. Read on!

Treasurer Young and Hunter Railey. It's terrific to have you with us here today at RSM. Treasurer Young, when we spoke for RSM April of 2020, your bill for a Colorado secure savings program had just been introduced. Where are you now?

Treas. Dave Young: Well, we have covered a lot of ground since then. We did get the bill passed, as you know. And I have jumped through a lot of hoops and over a lot of hurdles to get to where we are today – with a smoothly operating Colorado Secure Savings program.

An important early decision was the selection of our program director. We're honored to have Hunter Railey in that role with us since 2021. Hunter was very involved in the legislative effort to try to pass the bill, and as we went through the study process. Subsequently we've hired other key staff; we brought in AKF as our program consultant, and Segal Marco as our investment consultant. Those consultants helped us with the procurement process to select Vestwell as program administrator, and then Blackrock and State Street as our fund managers. 

We've also focused on a lot of policy work with our board. Hunter and his team have been instrumental in one-on-one work with board members. I really think we have a very dedicated and efficient board process, and that’s been helpful.

Finally, you've seen a lot of discussion about state partnerships, which were allowed in the legislation. As you know, we have signed an agreement with Maine to join us as a partner. And they began to enroll businesses and savers in Maine this week. So -- a lot of activity since April 2020. And, we still have a lot of work to do.

Hunter, great kudos! What are you focusing on now in 2023, recognizing that Colorado is a big state, and you've got a lot to do.

Hunter Railey: Yes, the work seems to keep expanding.

Internally we've been focused on getting a handle on the compliance data, figuring out who we have reached, and who we have not. We are working to make sure we're getting in front of those folks before enforcement begins, which is set to start in March of next year. This is probably not news to anyone working in the programs, but state data is a little clunky at the outset. We have to do a lot of work to get that data cleaned up and to make sure we're reaching the appropriate parties.

We have another implementation wave that begins in January of next year. We expect to see ongoing enrollment activity with this wave, and with new employers that have matured into eligibility.  Along with that we are rethinking our outreach and marketing strategies. We now have a good amount of enrollment data. It's giving us a good sense of where our savers are, where they are not, and who we need to reach.

That allows us to think about how we can adjust our strategies going into 2024. I'll take a moment to extend my thanks to our team members Anna Stevens and Daniela Liebovici for the program management and communications work they are doing here.

Externally, we have the program partnership to manage. As the Treasurer mentioned, Maine is now up and running with its pilot program. We're in conversations with Delaware to see if we can get them signed on to the Partnership for a Dignified Retirement and we're talking to several other states as well.  This involves both doing the outreach, sort of doing the sales pitch to states as it were.

It also involves going through the governance model and our contracts with a fine tooth comb to make sure that we've  created a solid governance structure where states at the table are equal partners in administering their programs. It can be a little time consuming. At this stage, it's been about a two-year process to get a first partner on board. And we're really happy with where we landed with Maine.

That's awesome. Treasurer Young, from your perspective, why are these partnerships important?

Well we know that there are states that may not have enough savers to stand up a program on their own and have the fee structure really work for them. Based on our fund manager contracts, the more assets under management we have, the better price breaks we get. Not only does that lower fee structure benefit partner states -- it also helps our Colorado savers who will experience a faster reduction in fees over time. 

As Hunter mentioned, we want a real collaborative partnership. We are very clear and open with how we've done our work in selecting our third-party administrator and our fund managers. That is a lot of work to go through that partner states like Maine can benefit from. They don't have to recreate the wheel, and it really speeds up the implementation process for them.  So, savers benefit, the program itself benefits because it moves quicker.

I'm also sensitive to the fact that we may be a little bigger than some of our partners. You may remember being in DC in February of 2019. That was the first time that I went to a NAST meeting, and (Treasurer) Tobias Read was there talking about partnerships. I started thinking about the three states that were involved, you know, Oregon, pretty close to the size of Colorado, but California and Illinois, obviously much larger. I started thinking, what would it be like to be in a partnership with a state that was so much larger -- how do you get a fair shake out of that? In the process of developing our Partnership for a Dignified Retirement, I was sensitive to the fact that we want states, regardless of size, to feel like they have a fair shake in the partnership.

Important. Hunter, turning to you -- If I'm Maine, or Delaware, or another state that is planning to join the Partnership for a Dignified Retirement, what should I be thinking about?

I see a couple of things worth considering. One main benefit is time to market. We just demonstrated with Maine that from the time a contract and governance agreements are signed, it takes about three months to get the pilot going.

We designed the partnership as a turnkey solution. We started with the Roth IRA, knowing that it is the most ubiquitous retirement account in the country. We also made sure we had a good investment lineup, and overall, ensuring we had a good and stable core platform was the biggest priority.  The procurement process in state government can take, especially if you have to retain investment managers and a recordkeeper, as much as 18 months of work. Partnering simplifies that entire process. We have very competitive fees that would be offered to all partner states. So today's Maine savers are getting the same fees as Colorado savers who are getting the same fees as Delaware savers. And that's how that's going to work moving forward under our current contract.

We can imagine that's very attractive. Looking forward, Treasurer Young, what thoughts would you share with your fellow Treasurers?

I go back to where we were in early 2020. We saw in COVID how many people were unprepared with emergency savings when they got laid off. They were really struggling. It drove home the point that this is an issue that should be front and center for everyone in the country.

We don't want people to be in unsustainable positions, and to be in poverty in retirement. This is just a bad pathway that we can begin to remedy relatively easily.

You heard the work Hunter and his team have had to do but it is very much a doable process. And so, my advice to treasurers is keep forging ahead. This is an important issue.

Legislators and other elected officials are by definition, often tasked with responding to short term needs and immediate issues that are coming up.  That's important, but if no one is looking after overarching issues like retirement savings, and taking strides now, you never get ahead of the curve.

We may be a bit behind it now but at least taking action right away really changes the trajectory. And at the end of the day, it's about people. It's about their lives, their families and their financial health. If you can keep your focus on why you're doing it and who you're doing it for, I think it makes all the difference in the world.

That feels very wise. Hunter, you are responsible for the day-to-day but you also see the impact on your employers and everyday folks in Colorado. What words to the wise might you have for other state leaders and supporters.

Two things jump out. One is that statutory design matters a great deal. No bill is perfect. But we had really good core legislation to work with that didn't include a lot of barriers and that really kept us focused on providing a retirement solution to folks.

Two, having advocates that understand the nuances of the legislation, that understand the big picture, is also advantageous. Saying a bit more: these programs are only as successful as the level of focus you put on the individual saver and the employers who will engage with the program. Anything you add that makes it more complicated is a problem. We're talking about a group of people that just don't have a lot of time to focus on these things. 

Treasurer Young likes the easy button reference. And that needs to be the goal for everything we develop. It needs to be easy to work with, easily accessible, and as easy to understand as humanly possible.

Treasurer Young?

This drives us forward on the Partnership for a Dignified Retirement too.  Partner states are still running their own program. We're not telling them how to brand or how to market. That's their job in their state. We give them all the latitude in the world to get that done. But we provide a framework and platform that gives them the easy button to get a good program off the ground. You know, generous support and advice is the hand up that we got from other states, particularly Oregon, and we are returning the favor more than anything.

Gentlemen - what else are you thinking about?

Hunter Railey: I’ll add two comments. One thing we're looking to provide is a fluid way to share best practices and to make sure, especially with smaller states, that folks feel they have colleagues they can lean on for ideas. Two, there's a lot moving in retirement policy right now. So innovation is the name of the game as we move forward. At the same time, an important nuance is not whether we want to do something, but how to provide it to savers in a way that doesn't disrupt programs or disrupt how people are thinking about their future.

Treas. Dave Young: We often talk about related kinds of savings issues, including emergency savings or conversations about looking at the big picture of people's lives and how we help support them. Retirement savings is a piece of that. But it's not the only thing that we need to pay attention to.

This innovation in how we think about the financial health of individuals and their families, and how we support that, is going to continue to evolve.

At the end of the day, people don't have to be struggling. What we've done in retirement savings -- not Colorado by itself, but all of us together -- proves that a concerted effort actually does have an impact, and does change the financial trajectory for people.

So we shouldn't be too timid to address these other areas as well. This is going to take some bold thinking. And, you know, we have partners at the federal level that are talking about some of these issues in Congress. Aspects like the refundable Saver’s Match are going to make a big difference if we can get things figured out together. There’s some work that federal partners can do to really support this set of efforts in a positive way.

We certainly want to engage with them and make sure they're aware of how deep this work is that we're currently doing, state by state.

Thank you, Treasurer Young and Hunter for sharing your experience and insights with us. We can’t wait to see what’s coming next in Colorado.

Dave Young is a native Coloradan who started his career as an educator, teaching math, science, and technology at Heath Junior High in Greeley for 24 years. He then went on to teach at CU Denver for another decade, and worked in the private tech sector for about four years. Dave decided to run for public office because of the challenges his sister faces as a person with disabilities. In 2011, he was elected to the Colorado House of Representatives and in 2014, he was appointed to Colorado’s Joint Budget Committee. Dave was sworn in as State Treasurer in 2019. He has spearheaded several economic justice initiatives, including Colorado SecureSavings and the CLIMBER Loan Program. He was reelected for a second term in 2022. Dave is married to State Representative Mary Young, Ph.D. Dave’s sister lives in Pueblo.

As director of the Colorado Secure Saving Program, Hunter Railey works with his board to oversee all aspects of the Program, including design, structure, governance, operations, partnerships, and marketing. In this role, Mr. Railey spearheaded the development of a multistate governance framework that is now the Partnership for a Dignified Retirement and serves as its founding chairman. Before joining the Colorado Department of the Treasury, Hunter served as Colorado Director for Small Business Majority, a small business advocacy and research nonprofit.

This piece was also featured in the November 30, 2023, edition of Retirement Security Matters. For more fresh thinking on retirement savings innovation, check out the newsletter here.