Vermont’s journey to make its auto-IRA program a reality is poised to go much more quickly as the state eyes a key collaboration. Vermont state treasurer Michael Pieciak said it has chosen Colorado to assist in the development of the state’s public retirement program, VT Saves.
Vermont’s auto-IRA program, originally slated for a phased rollout between July 1, 2025, and July 1, 2026, is now on pace to launch by year-end, promising to provide numerous Vermont workers without existing retirement plans a new avenue to save.
The proposed partnership aims to utilize Colorado's experience from its Colorado SecureSavings program, an auto-IRA retirement savings initiative that has seen significant participation and growth since its inception.
"Partnering with Colorado will lower costs, help achieve better returns, and position VT Saves to launch sooner," Pieciak said in a statement, emphasizing the collaboration’s role in "expanding retirement coverage and supporting financial equity in our state."
The Colorado SecureSavings program, launched last year, has already enrolled more than 14,000 employers and tens of thousands of Coloradans, amassing more than $50 million in AUM.
A recent paper by Georgetown University’s Center for Retirement Initiatives offers a strong endorsement for multistate initiatives, particularly for smaller states that may find it hard to administer an auto-IRA program on their own.
“A state partnership can help a new program launch more quickly because it can take advantage of the existing infrastructure of another state’s established program,” the study said, pointing to cost benefits from reduced startup fees and lower costs over time as savers find economic strength in numbers.
If it succeeds in its negotiations with Colorado, Vermont will become part of an expanding interstate consortium that already includes states like Maine and Delaware.
"The Colorado SecureSavings Program is delighted to enter into negotiations with Vermont and welcomes the expansion of the Partnership for a Dignified Retirement," said Colorado state treasurer Dave Young.
VT Saves requires employers that have five or more workers and don’t offer a retirement plan to enroll in the program. Employees will be automatically registered for a Roth IRA through payroll deductions, although they can opt out at any time.
The program, which was enacted unanimously last year, operates at no ongoing cost to taxpayers and is designed to simplify retirement savings.
With 16 states now hosting auto-IRA programs, including the most recently enacted program in Washington, the VT Saves initiative, backed by Vermont's partnership with Colorado, is poised to make a substantial impact on the retirement readiness of its citizens.
Recent data indicate a strong uptake in similar programs across the US, with participation rates between 70 percent and 75 percent among eligible employees. According to a recent study by AARP, such initiatives could potentially double the household wealth for people of color, depending on the age of the worker, over time.
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