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New Virginia law would set up retirement accounts for people whose employers don't offer one

Ana Ley, The Virginian-Pilot on

Published in Home and Consumer News

VIRGINIA BEACH, Va. — A new law being considered by Gov. Ralph Northam would set up a retirement savings plan for private-sector workers whose employers don’t give them one.

The so-called VirginiaSaves program would allow Virginia to offer IRA accounts to people with no other options to save for retirement. The bill lets the state take a no-interest treasury loan of up to $2 million each year until it is self-sustaining. Eligible businesses wouldn’t have to chip in, and employees will be automatically enrolled but they have the option to opt out of investing.

The bill, HB 2174, was sponsored by Democratic Delegate Luke Torian, who chairs the House Appropriations Committee.

It calls for the state to administer the IRA plan, but no state money would go into workers’ accounts.

Lawmakers had sent their proposal to Northam for a signature when they wrapped up this year’s General Assembly session, but the governor instead suggested making the program more widely available by including part-time employees who work at least 30 hours per week.

 

Delegates agreed when they gathered Wednesday to consider this and other proposed amendments from Northam. But the Senate rejected the proposed change. Now, the governor has the option to sign the version as it originally passed, veto it or offer more amendments by May 7.

In a prepared statement, the National Federation of Independent Business praised senators for rejecting the amendment and urged delegates to follow suit.

“Small-business owners are encouraged by the actions of (the) Senate,” said Nicole Riley, the group’s Virginia director. “Our small-business owners are still focused on recovering from the COVID-19 pandemic. The last thing they need is a government mandated program that requires them to fill out additional paperwork and spend time away from what they do best: creating jobs for Virginia’s economy.”

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