Delaware Expands Auto-IRA Program, Joins Colorado Consortium

Delaware announced Monday that it is partnering with Colorado’s interstate consortium of state-run retirement savings programs to launch Delaware EARNs with the goal of expanding retirement savings among private sector workers.

The state auto-IRA will be available to Delaware private sector employees who don’t have access to a retirement plan on a voluntary basis, and is fee-free for employers.

Vestwell, in partnership with BNY Mellon, will serve as the program administrator, providing recordkeeping, custodial and administrative services to employers and employees in the program, the recordkeeper announced Monday.

The news comes on the heels of New Jersey’s September selection of Vestwell as program administrator for its Secure Choice Savings Program. The Delaware program marks Vestwell’s eighth state auto-IRA program.

The Delaware EARNS—or Expanding Access for Retirement and Necessary Savings—program was first enacted in September 2022, making it the 16th state in the U.S. to create a state-run retirement program for private sector employees; the total rose to 19 this year. The partnership with the Colorado consortium aims to accelerate the launch of the EARNS program.

According to the Georgetown University Center for Retirement Initiatives, nearly 40% of private sector employees in Delaware do not have access to retirement savings through their workplace. The EARNS program aims to serve small businesses, as well as middle- and low-income private sector employees, who lack access to retirement savings.

Delaware joins Colorado’s consortium, called the Partnership for a Dignified Retirement, along with Maine, which entered into the partnership in August.

“We are grateful to the EARNS Program Board for supporting our entry into this innovative consortium with Colorado and Maine,” said Delaware State Treasurer Colleen C. Davis in a statement. “Doing so will ensure that Delawareans have the highest quality choice when it comes to retirement savings. Nearly 150,000 Delaware workers currently have no way of saving for retirement through their workplace. Today, we took a major step toward closing that gap.”

EARNS Board Chair Fayetta Blake said in a statement that Delaware will save on start-up time and costs by joining the partnership, and Delaware participants will benefit from “economies of scale” that will help them grow their savings over time. Partnership programs are tied to the employee, instead of the employer, making the account portable if employees leave and change jobs.

As of June 30, 19 states have enacted one of a variety of state-facilitated retirement savings programs for private sector workers and there is now more than $1 billion in assets in these programs. New auto-IRA programs were enacted just this year in Minnesota and Nevada, while Missouri started a multiple employer plan. Additionally, Vermont switched its format to auto-IRA from MEP.