Colorado SecureSavings: Does Your Business Have to Register? 5 Employees, 2 Years and Fines
Colorado SecureSavings: Does Your Business Have to Register? 5 Employees, 2 Years and Fines
If you run a business in Colorado and have employees on payroll, the Colorado SecureSavings program employer rules deserve a careful read. SecureSavings is a state-run individual retirement account (IRA) program created under C.R.S. 24-54.3-102. Certain employers must participate, and state enforcement was announced to begin in 2026. Whether you are covered comes down to four tests, and each one has a specific look-back period.
This guide walks through those tests, explains who counts as a covered employee, lays out the penalty structure, and shows you how to confirm your status before you assume anything.
The Short Answer: Four Tests
Your business must participate in Colorado SecureSavings if all four of these are true:
- It does business in Colorado.
- It employed 5 or more employees at any time in the previous calendar year.
- It has been in business for at least 2 years.
- It has not offered a qualified retirement plan in the preceding two years.
If any one of these is not met, you are not required to join at this time. Because headcount changes from year to year, recheck the tests each year rather than relying on a one-time answer.
Test 1: Doing Business in Colorado
The mandate applies to employers that do business in Colorado. This guide does not try to define every activity that counts as doing business in the state. If your business is based outside Colorado but has Colorado employees or customers, ask the program how the rule applies to you before you decide. Do not assume an out-of-state address takes you out of scope.
Test 2: Five or More Employees
This test looks back at the previous calendar year and asks one question: did you have 5 or more employees at any time during that year? It is not an average, and it is not a snapshot on a single date. A business that had five people on payroll for even a few weeks in the prior year can meet the test, even if it has fewer staff today.
Seasonal hiring is where many employers get caught. A restaurant that adds five summer staff in June meets the headcount test for that year even if it drops to two employees in January. Start with your peak headcount, then confirm with the program which workers its count includes, such as part-time and seasonal staff.
Test 3: Two Years in Business
The business must have been in business for at least 2 years. A brand-new company is outside the mandate for its first two years, even if it hires quickly. Check your formation date against your record on the Colorado Secretary of State business search. If you converted your entity type or changed ownership, confirm with the program how it counts your start date.
Test 4: No Qualified Plan in the Preceding Two Years
A qualified retirement plan includes 401(k), 403(b), SIMPLE, SEP and similar plans. If your business has not offered one of these in the preceding two years, this test is met. If you offered one at any point in that window, the test is not met, and you are not required to join while the window is open. A business that offers its own qualified plan is not required to join. For a plan you recently closed, confirm the exact timing with the program.
Who Counts as a Covered Employee
The headcount test and the covered employee rules are separate questions. For participation purposes, covered employees are workers who meet all three of these criteria:
- They are 18 or older.
- They have been employed for at least 180 days.
- Their wages are subject to Colorado income tax.
Workers who fail any of these are not covered. Confirm with the program how it applies the criteria to part-time workers, workers who live out of state, and workers hired and separated within the same year. Those details affect the count that drives your penalty exposure.
Registration Timing: Waves and Newly Qualifying Businesses
The state ran registration in waves. The first wave covered employers with 50 or more employees, and the second covered employers with 5 to 14 employees. Both waves ran in 2023 and 2024. Businesses that qualify after that register as they meet the test.
This guide does not list a fixed registration deadline for a business that newly crosses the threshold. Check coloradosecuresavings.com or call the program to get your date. Do not wait for a notice to start that conversation.
Penalties: $100 Per Employee, Capped at $5,000
The penalty comes from state treasury rule 8 CCR 1508-3. It is $100 per employee per year, with a cap of $5,000 in a calendar year. The Colorado Department of Labor and Employment (CDLE) imposes the penalty only after repeated notices of non-compliance.
Two things follow from that structure. First, the notice stage is your opportunity to fix the problem, so answer every notice you receive. Second, the cap limits your exposure in any single year, but it does not remove the obligation. Using a hypothetical count of 20 employees, the rule would produce $2,000 for that year (20 times $100). A hypothetical count of 60 employees would reach the $5,000 cap. Confirm with CDLE how the employee count is applied before you rely on any figure.
How to Check Your Status in Five Steps
- Pull your payroll records for the previous calendar year and identify the highest number of employees on payroll at any point.
- Confirm your formation date on the Colorado Secretary of State business search and verify that you have been in business for at least 2 years.
- Review your retirement plan history for the preceding two years, including any plan you closed.
- Confirm whether your activity counts as doing business in Colorado.
- Check coloradosecuresavings.com or call the program to confirm your status and registration date.
| Test | What qualifies | What to verify |
|---|---|---|
| Doing business in Colorado | Activity the program treats as doing business in the state | Out-of-state employers with Colorado staff |
| Headcount | 5 or more employees at any time in the previous calendar year | Peak headcount, including part-time and seasonal staff |
| Time in business | At least 2 years | Formation date on your Secretary of State record |
| Retirement plan history | No qualified plan offered in the preceding two years | Dates of any 401(k), 403(b), SIMPLE, SEP or similar plan |
Your Options: Join SecureSavings or Offer Your Own Plan
If you are required to participate, you must register. If you are not required, or you would rather offer your own plan, the choice is a business decision with real tradeoffs.
- Participate in SecureSavings: You do not need to design or administer a retirement plan of your own. Confirm with the program what it requires from your payroll process and any employer obligations before you start. This guide does not list program fees, so check with the program for current costs.
- Offer a qualified plan: A 401(k), SIMPLE, SEP or similar plan gives you more control over plan design, and offering one keeps you outside the mandate under Test 4. The tradeoff is setup work, ongoing administration and provider costs. This guide does not list plan costs, so request quotes from providers and review them with a CPA or plan advisor.
Frequently Asked Questions
Do part-time workers count toward the 5 employee threshold?
Confirm this with the program. How part-time and seasonal staff are counted should be verified before you decide whether the headcount test is met.
If I offered a 401(k) three years ago and then stopped, am I covered?
If your last qualified plan ended more than two years ago, Test 4 is met, and the other three tests decide the question. Confirm the timing with the program.
Does offering an SEP affect my status?
Yes, potentially. The test names SEP among the qualified plans, so offering one within the preceding two years means the test is not met. Confirm how the program treats your specific arrangement.
Where to Get Help
- Colorado SecureSavings: coloradosecuresavings.com, the source for your registration status and date.
- Colorado Secretary of State: business search, for confirming your formation date.
- Colorado Small Business Development Center (SBDC) Network: sbdc.colorado.gov, for general small business advising.
- A CPA or employment benefits attorney, for decisions about plan choice, payroll and penalty exposure.
Disclaimer: This guide is informational content, not legal or tax advice. Program rules, penalties and enforcement timing can change. Confirm your obligations with the program and a qualified attorney or CPA before making decisions that affect payroll, retirement plans or taxes.