Delegate Torian’s legislation to create a State run retirement program has passed House Appropriations Committee and will now be heard on the House floor. This legislation requires all employers, with five or more employees, and who do not offer an eligible retirement program, to participate.The bill was amended in full committee to make it clear that participating employers will not be required to contribute. Employees of participating employers, will be automatically enrolled in the program unless they opt out. If this bill passes, enrollment in the program will begin no later than July 1, 2023. You can find a full summary of the legislation below.
Directs the governing board of the Virginia College Savings Plan (the Board) to establish an automatic enrollment payroll deduction individual retirement account (IRA) retirement savings program, to be known as the VirginiaSaves Program (the Program). The Board shall administer the Program and develop requirements, procedures, and guidelines for the Program, including default contribution rates, procedures for enrollment and withdrawal, and procedures for noncompliance. Moneys in the Program shall be invested in a manner deemed appropriate by the Board.
Participation in the Program is mandatory for eligible employers, defined in the bill as self-employed individuals, sole proprietors, and nongovernmental employers having five or more employees that do not offer a qualified retirement plan to their employees. Each eligible employee, defined generally as an individual employed by an eligible employer, shall be enrolled in the Program unless the employee elects not to participate in the Program.
The bill contains provisions limiting the liability of the Board, the Plan, and the Commonwealth or any of its political subdivisions, for obligations associated with the Program. The Commonwealth shall have no duty or liability to any party for the payment of any retirement savings benefits accrued by any individual under the Program.Participating employers shall not (i) have any liability for an employee's decision to participate in or opt out of the Plan, (ii) be a fiduciary over the Program, or (iii) have any liability or responsibility related to the operation of the Program.
The Program shall be established, and enrollment shall begin, no later than July 1, 2023.