Thank Your Legislators for Helping More Virginians Save for Retirement!
Many full-time workers in Virginia will now have a new way to save for their retirement thanks to the General Assembly's passage of the VirginiaSaves Program. House Bill 2174, passed in the 2021 General Assembly session, establishes the VirginiaSaves Program, a Virginia state-facilitated automatic IRA savings program, no later than July 1, 2023. VirginiaSaves will be administered by the Virginia College Savings Plan (Virginia529) and will:
• Establish an auto-IRA retirement savings vehicle for approximately 800,000 of the 1.2 million private sector workers who do not currently have access to employer-sponsored retirement savings plans.
• Establish participation guidelines for eligible employers with 25 or more eligible employees and who have been in business for at least two years prior to implementation of VirginiaSaves.
• Provide a grant program to defray implementation costs - if any - for small businesses. Because the state is the program administrator, costs for small business owners will be minimal or non-existent.
• Create a portable, simple, and affordable retirement savings vehicle for employees with the choice to opt out or adjust contribution levels at any time.
• Establish a comprehensive and collaborative outreach and education campaign to onboard eligible employers throughout the Commonwealth in a phased and tiered manner.
• Create a retirement planning financial education program for participants.
Research shows that people are 15 times more likely to save if they have the option to do so through their workplace and 20 times more likely if it is automatic.
With VirginiaSaves, businesses will have access to a simple, plug-and-play option that provides an easy pathway for owners and their workers to start building a safety net and growing the savings they need to take control of their future. It also helps smaller businesses compete with larger employers, helping them recruit and retain employees while sparing them the burden and liability of administering plans themselves.
Giving employees a simple way to save for retirement will mean fewer Virginians will need to rely on public assistance later in life, which will save taxpayer dollars. Virginia could save taxpayers as much as $135 million between 2018 and 2032 if lower-income retirees saved enough to increase their retirement income by $1,000 more per year.
All of this is reason to join AARP Virginia to say THANK YOU to the legislators who voted to establish the VirginiaSaves Program!