Washington—The Pew Charitable Trusts commended the Virginia Senate Finance and Appropriations Committee on its approval today of legislation (H.B. 2174) that would create VirginiaSaves, a public-private partnership for private sector workers in the commonwealth who do not have retirement benefits at their workplaces. The measure has passed the House and will next move to the full Senate.
VirginiaSaves would automatically enroll workers in an individual retirement account (IRA), in which a small proportion of their pay would be set aside every pay period. Employees could opt out of the program at any time or change the amount they save. The only tasks for employers would be to register employees for the program and facilitate payroll contributions. Seven states—California, Colorado, Connecticut, Illinois, Maryland, New Jersey, and Oregon—have adopted similar auto-IRA programs, and Virginia is among several other states considering them.
John Scott, director of The Pew Charitable Trusts’ retirement savings project, issued this statement:
“VirginiaSaves will be a big step toward achieving retirement security for workers while addressing the looming fiscal burden of the growing number of older Virginians who have insufficient savings. Absent a program like VirginiaSaves, we estimate that the commonwealth can expect to spend an additional $11.8 billion over 15 years from line items such as Medicaid because vulnerable households haven’t been able to save enough for retirement.
“We applaud the Finance Committee for moving this legislation to the full Senate and urge its passage there.”