Vestwell, a New York City-based financial technology company, today announced it has won a competitive bid to administer both the Colorado Secure Savings Program and the New Mexico Work and $ave auto-enroll IRA programs—the first fintech company to do so, Vestwell said in a news release.
“We are proud to power the first-ever, multistate auto-IRA program in the country,” Aaron Schumm, founder and CEO of Vestwell, said in the news release. “Colorado and New Mexico are pioneering the next phase in retirement savings through cross-state partnerships, bringing dignified savings solutions their workforce deserves.”
The announcement comes on the heels of Colorado and New Mexico signing a memorandum of cooperation for their auto-enroll IRA programs. Through their 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.
Under the Colorado Secure Savings Program, 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 401(k) plan, impacting 40% of the state’s workforce. The pilot program is expected to begin in October 2022 and enrollment will begin in 2023.
New Mexico Work and $ave, expected to launch on July 1, 2024, will support 62% of the state’s private-sector employees who currently do not have a retirement plan through their employer. The hybrid program will consist of a voluntary IRA and web marketplace that will offer options selected by a state board. All companies with their primary place of business located in New Mexico will be eligible to participate, regardless of their size, the release said.
Both the Colorado Secure Savings Program and New Mexico Work and $ave program 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.
“State programs have turned to Vestwell for our award-winning team, technology, and industry-leading partners,” Douglas Magnolia, president of Vestwell, said in the news release. “We have the unique understanding of how to effectively support state-partners-run (IRA) programs due to our extensive experience working with states across the country on 529 College Savings, 529A ABLE (“ABLE”), and Secure Choice/Auto-IRA state-sponsored savings programs.”
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.