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Retirement Plans

Virginia legislator introduces bills to increase retirement savings

Two bills have been introduced in the Virginia House of Delegates that aim to increase retirement savings.

One bill would enable employees in the private sector to invest in a retirement savings program if their employers don't offer one. The other would allow private employers to connect with financial services firms that offer retirement plans.

The bills, introduced Jan. 9 by Delegate Luke E. Torian, a Democrat, would create the My Virginia Plan and a 14-member board to establish and maintain the program.

The first bill would not require automatic enrollment but would mandate private-sector employers to "offer eligible employees the opportunity to contribute to the program through payroll deductions" or offer a substitute retirement plan. The board would set a default contribution rate.

The bill is similar in scope to the OregonSaves program, which was the first state-based automatic individual retirement account program rolled out in 2017.

The second bill would create a voluntary program for employers and employees. The board would design and operate a website that includes a "diverse array" of retirement plan options, including life insurance plans, plans that provide for employer contributions to enrollee accounts, and individual retirement accounts funded by payroll deductions.

The board would need to approve any financial service providers before they can participate in the program.

Dan Zielinski, spokesman for the Insured Retirement Institute, said in an email Tuesday, that the IRI has concerns with state-run retirement plans. "Rather than a state-by-state approach, IRI supports a uniform federal approach that empowers the private market to offer retirement solutions," Mr. Zielinski said.

In the absence of "comprehensive federal retirement security legislation," states are going to continue exploring their options, Mr. Zielinski added. "The better course, IRI believes, is to unite behind the effort to improve federal retirement laws that will boost the private market's ability to offer employee retirement plans under uniform rules that will boost much-needed retirement savings that will safeguard the financial security of older Americans," he said.