Governor’s Proposed Changes to the Virginia Saves Program Will Alleviate Burdens for Small Business

“We're thrilled that Governor Northam amended HB 2174, which would create the Virginia Saves Program (HB 2174), a state-run retirement savings program funded by modest payroll deductions. This is an important step to supporting small business owners and their employees in the Commonwealth who face barriers to accessing traditional retirement benefits. The Governor’s proposed amendment would allow part-time employees to participate in the program, which will help ensure employers don’t have to track their employees’ hours to determine eligibility. Without this amendment, this requirement would have placed a burden on employers. 

While we are pleased to see this legislation move forward, there are still challenges that remain that will prevent the smallest businesses from participating in Virginia Saves, and those are the businesses that face the greatest barriers to accessing retirement benefits. Currently, the legislation restricts access to employers with 25 employees or more. This excludes more than 90% of businesses, which could lead to low participation in the program.

We know that many small business owners want to offer retirement benefits to attract and retain talented employees, but they struggle to do so due to the cost and complexity of setting up a retirement plan. It should come as no surprise that nearly two-thirds of small business owners in Virginia said they support state efforts to enact a state-administered retirement program that would automatically enroll employees of businesses without their own plan.

We applaud this action by the Governor and we urge the legislature to immediately approve the amendment. We also urge the legislature to consider changing the business threshold to businesses with five employees or more in the future so our small businesses can benefit from this program.”