Five years after it was first introduced, the initiative to create a state-based retirement program for the private workforce in the Commonwealth of Virginia has taken a major leap forward—with a key change pushed by the American Retirement Association.
On Feb. 16 the Virginia Senate Finance and Appropriations Committee voted 12-1 (with two abstentions) to endorse a substitute amendment to House Bill 2174, which would authorize the Virginia College Savings Plan to establish a state-facilitated IRA savings program and require eligible employers to participate.
The substitute amendment contained changes to the version that passed the Virginia House of Delegates earlier this month, including a successful effort by the American Retirement Association’s government affairs team to clarify the types of retirement plan products Virginia employers can use to meet the new requirement to include automatic enrollment payroll deduction IRA programs offered by the private sector. With that change included, the ARA formally endorsed and testified in support of the substitute amendment that the Senate Finance and Appropriations Committee considered.
Also significantly, the substitute amendment also included a last-minute change to the definition of what constitutes an eligible employer to only include employers with 25 or more employees who do not already have a retirement plan (the original House of Delegates passed proposal covered employers with five or more employees). This change to reduce the scope of employers impacted should make the proposal politically palatable in the more conservative Virginia Senate.
The Virginia General Assembly is scheduled to adjourn on March 1, so the amended bill will now be considered by the full Virginia Senate with only a few days left remaining in the 2021 legislative session. Gov. Ralph Northam (D) has indicated he will sign the bill into law if the General Assembly approves it.
Andrew Remo is the American Retirement Association Director of Legislative Affairs.
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