In favor of programs to better facilitate the development and progress of my community.

Virginia529 (Sonia Valadez & Leslie Crudele) are online prepared to speak to HB 2714.

Del. Tyler and Members of the Committee, AARP Virginia supports HB2174. Unfortunately, a secure financial future is out of reach for more than 1.2 million Virginians who do not have access to a retirement savings plan at work, especially those who work for themselves or small businesses. AARP Virginia urges legislators to establish a VirginiaSaves retirement savings program, a public-private partnership to create a simple, plug-and-play retirement option that provides a pathway for private-sector employees and self-employed individuals to save out of their regular paychecks. It operates like a 529 college savings plan. The program is completely voluntary for employees. Employees choose if they want to participate. The state and employers are not on the hook for gains and losses. What you put in is what you get out, plus or minus gains or losses in the market. The state would establish a board within VA529 to oversee the program. This board would be responsible for the program terms, rules and regulations, and selection of service providers that will operate, administer, and oversee the program. Giving employees a simple way to save for retirement means fewer Virginians will need to rely on public assistance later in life, which will save taxpayer dollars. Research finds that Virginia would save $135 million on public assistance programs between 2018 and 2032 if lower-income retirees saved enough to increase their retirement income by $1,000 more per year. I’d like to provide response to some claims that have been made in opposition to this legislation: Claim: The program conflicts with federal law. Rebuttal: This program in no way conflicts with federal law, because it does not conflict with ERISA. The program is voluntary for employees, who are able to opt-out at any time, and it is not an employer-sponsored plan. The duties of the employer are purely ministerial and the program is not endorsed by employers. The CalSavers case referred to was dismissed in the past with leave to amend, and we are very confident that the final outcome will also be favorable to state-facilitated programs. Claim: Similar programs in other states have struggled. Rebuttal: These programs have shown great success already, with over $122 million saved in the three states that have auto IRAs up and running (Oregon, California, and Illinois) with more employers and employees enrolling every day. Oregon has been self-sustaining since 2019 and is no longer relying on loaned funds, and we have seen increased support for these programs even during the pandemic. They are operating as intended and helping a great many people save their own money for retirement. Claim: The passage of the SECURE Act makes the program unnecessary. Rebuttal: AARP supported the passage of the SECURE Act, and views it as a complement to state-facilitated retirement savings programs. It has no impact on Work and Save programs, and is not enough on its own to dramatically increase retirement savings around the country. AARP Virginia would like to thank Del. Torian for his continued leadership on this issue. We strongly urge the committee to pass this bill and establish VirginiaSaves to provide a payroll deduction option to save for retirement for the 1.2 million Virginians who do not currently have access to retirement savings plans at work. Thank you. Respectfully, Natalie Snider AARP Virginia State Advocacy Director

Virginia Retail Federation opposes HB2174. We have concerns with this legislation and the negative financial impact it will have on our members. The vast majority of our members cannot afford to offer retirement savings to their employees. This financial burden will be even more detrimental to these already struggling retailers due to the COVID-19 pandemic. Many retailers are hanging on for dear life just to stay open and keep their employees on the payroll, and cannot afford additional expenses.

In favor of programs to better facilitate the development and progress of my community.

In favor of programs to better facilitate the development and progress of my community.