Before he was elected as Colorado's state treasurer in 2018, Dave Young was a Greeley Democrat in the state House of Representatives who served four years on the Legislature's Joint Budget Committee.

The experience gave him insight into what happens when people don't save for retirement: Taxpayers end up paying for expanded safety net services.

"I sat on the JBC and watched our safety net services growing and growing," he told the Sentinel's editorial board on Wednesday. "When people don't plan well, they end up in retirement on those services — food stamps, Medicaid as well as Medicare and housing assistance. It's not a dignified retirement when you're having to access those services. And who's paying for them?"

Young was passing through Grand Junction on his way to Durango to tout his agency's role in upping the state's proficiency in financial literacy — not just in the state's public schools but among all members of society.

Part of Young's duties, in addition to his main job of administering the state's treasury, is sitting on boards and committees that guide economic policy or have fiscal oversight of certain state functions. Between now and next February he'll chair the new Colorado Secure Savings Plan Board, authorized by Senate Bill 173, tasked with investigating "approaches to increasing retirement savings for private sector employees in a convenient, low-cost, and portable manner that are financially feasible and self-sustaining."

Other states have already taken the plunge and come up with ways to get non-public sector workers to enroll in low-fee, professionally managed saving plans administered by the state. Oregon, for example, automatically enrolls all workers in a plan that deposits 5% of their pay into a savings plan, Young said. They can opt out if they don't want to participate. Washington, on the other hand, has a marketplace plan — an exchange similar to how many states enroll people in health coverage — that workers can opt into.

Encouraging workers to save sees like a good idea to us, provided the state's plan doesn't interfere with financial services available through the private sector.

But as Young points out, "this is money that isn't in their sector now. People aren't contributing this at all." Moreover, the Secure Savings Plan Board will have eight members appointed by the governor, five of whom must come from the financial services industry.

"We're going to have to address their concerns in this process, but the goal of the bill is to come with a recommendation, so we'll do some deep, actuarial studies, actually analyze what effect better financial literacy would have and also consider the impact of doing nothing at all," he said. "Well, we're already seeing it, and it's not good."

Several small-business owners testified in support of the study bill, Young said, because they want to offer their employee better retirement benefits, but don't have the resources to make it happen. Many see a state savings plan as a way to better compete for top talent. The legislation directs the board to find a way to make the savings portable, so workers can take their retirement accounts from job to job.

Other goals should be that the plan not be taxpayer subsidized or overly burdensome for employers, Young said.

"It's ultimately the plan participants who are making this work," Young said.

The board has a heavy lift putting forth a recommendation that hits all the targets. But the Legislature was prudent to start thinking about ways to minimize the state's retirement crisis. Hopefully the board will come up with something that promotes savings without costing taxpayers money or pinching the financial planning industry.

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