Virginia has enacted legislation to create a state-administered individual retirement account (IRA) program. Enrollment for the program will begin on or about July 1, 2023.
Overview:
The Board of the Virginia College Savings Plan will administer and oversee the program and develop requirements for default contribution rates as well as procedures for enrollment and withdrawal.
Covered Employers:
House Bill 2174 will require certain employers to enroll eligible employees into the state-run retirement program. Other employers may choose to participate on a voluntary basis. Participation is required for businesses that:
- Do not offer a qualifying retirement plan;
- Have been in operation for at least two years prior to July 2023; and
- Employed 25 or more eligible employees for the quarter ending December 31 and the preceding three quarters of the preceding calendar year.
Covered Employees:
Employees must have Virginia taxable income and must work at least 30 hours per week to participate in the program.
Employer Requirements:
House Bill 2174 requires employers to enroll and facilitate a payroll deposit retirement savings agreement for eligible employees unless the employee elects not to participate or stops participating. Employers are not permitted to contribute to the program or to endorse or otherwise promote the program.
Compliance Recommendations:
Covered employers should ensure compliance with House Bill 2174 by July 2023. Watch for further guidance prior to implementation of the program. Please contact your dedicated service professional with any questions.