VirginiaSaves Progresses Through State Legislature
The VirginiaSaves auto-IRA program was progressing through the state legislature as of late February. The House of Delegates on January 26 passed a bill to create the program. On February 5 the Senate Finance and Appropriations Committee approved it on a 16-0 vote, clearing its way for consideration by the full Senate and eventual enactment.
VirginiaSaves Progresses Through State LegislatureThe VirginiaSaves auto-IRA program was progressing through the state legislature as of late February. The House of Delegates on January 26 passed a bill to create the program. On February 5 the Senate Finance and Appropriations Committee approved it on a 16-0 vote, clearing its way for consideration by the full Senate and eventual enactment.
The sponsor of the bill, HB 2174, is House Appropriations Committee Chairman Luke Torian, a Democrat. He noted in a press release that 45 percent of Virginia's workforce lacks access to a workplace retirement savings plan. Payroll savings program have proved successful in helping workers to save.
The legislation stipulates that the VirginiaSaves program would be sponsored and administered by the governing board of the Virginia College Savings Plan, also known as Virginia529, which would establish a program advisory committee to provide specialized expertise. The program would require participation by employers that do not already offer a retirement benefit and that have five or more workers. It would begin enrolling eligible employees no later than July 1, 2023, and would establish a maximum penalty for non-compliance of $200 per eligible employee per year.
“Virginia529 can do for retirement planning what it did for college savings,” Torian said.” VirginiaSaves could be a crucial wealth building mechanism so that a single unexpected expense does not force Virginians to borrow or cut essentials from a fixed budget.”
Torian said HB 2174 has been supported by Governor Northam, AARP Virginia, Small Business Majority, and The Pew Charitable Trusts.
Nationally, three auto-IRA programs are in operation, and additional programs are in the start-up phase. The three active programs are OregonSaves, Illinois Secure Choice, and California's CalSavers, which administered a combined $172.5 million in auto-IRA assets as of January 31, according to the Georgetown Center for Retirement Initiatives at Georgetown University. About two-thirds of eligible employees currently participate, with the remainder opting out.
You may also be interested in: Maine Advances Secure Choice Bill; Colorado Signs Colorado Secure Choice Savings Program Into Law.