SENATE CONCURRENT RESOLUTION NO. 91

(By Senators Prezioso, Facemire, Edgell, Plymale, McCabe, Wells, Chafin, Yost, Unger, Stollings, Laird, M. Hall, Blair, Barnes, Boley and Sypolt)

[Originating in the Committee on Finance]

Requesting the Joint Committee on Government and Finance to study the advisability and feasibility of creating a cost-effective and portable group government-managed retirement savings program made available to small businesses and their employees by the State Treasurer, including the compliance costs and legal implications to the state and its small businesses that could result from applicable federal law as well as the tax treatment accorded to the investment options pursuant to applicable federal law under such a program, or to encourage and promote currently available private sector financial and retirement security opportunities for small businesses and their employees through portable defined contribution plans, such as Simple IRA, SEP, 401(k), 457, Regular/Roth IRA and individual annuities, which are already available in the commercial marketplace.

    Whereas, The Legislature recognizes that in a recent AARP survey, nearly seventy percent of West Virginians expressed anxiety about their savings for retirement; and

    Whereas, The Legislature recognizes that current commercial employer-sponsored retirement plans offer more than eighty-three million American workers and their families the opportunity to accumulate savings and improve their retirement security, and the Bureau of Labor Statistics reports that, even for those workers age thirty-five to forty-four, median job tenure is only 5.3 years with the current employer, which demonstrates the need for portable and flexible retirement solutions; and

    Whereas, The Legislature recognizes that the savings and investments held in the current commercial retirement system represents the largest share of American households’ total accumulated financial wealth with retirement assets of $20.8 trillion outside of Social Security benefits; and

    Whereas, The Legislature recognizes that according to the AARP many employees and small businesses lack information on how to best plan for retirement, and forty-five percent or three hundred ninety-four thousand seven hundred three West Virginia workers would benefit from improved information as to how to access employer-sponsored or payroll deduction retirement savings available in the private market or in a proposed new government-managed plan; and

    Whereas, The Legislature recognizes that while no state has implemented a Voluntary Employee Retirement Accounts (VERA) program to offer small businesses an opportunity to establish a basic retirement savings option for employees under the administration of a government agency, West Virginia should conduct such a study since some states are currently exploring these governmental options; and

    Whereas, The Legislature recognizes that a VERA plan in West Virginia may provide workers a simple way to save for retirement which will result in fewer West Virginians relying on public safety net services, saving taxpayer dollars; and

    Whereas, The Legislature recognizes that there is a need to determine if any potential retirement program by VERA would be less expensive and not in direct competition with the viable and robust employee and employer portable retirement programs already offered by banks, financial institutions, insurance brokers, private insurers and their licensed agents; and    

    Whereas, The Legislature recognizes that a complete fiscal analysis needs to be conducted in order to determine the financial implications of a proposed allocation of $3 million in state-managed funds from the transfer of money from the Unclaimed Property Trust Fund in the Treasurer's Office for start-up of the VERA program, as well as all costs determinant to investment and actuarial compliance with federal securities laws; and

    Whereas, The Legislature recognizes that state government-managed IRAs could be a disincentive for employers considering the sponsorship of 401(k) or Simple IRA plans and may cause some employers to drop existing plans to avoid required employer contributions, which generally account for a significant portion of an employee's retirement assets, and such results would be contrary to the intended purpose of VERA to enhance employee savings; and

    Whereas, The Legislature recognizes the AARP's recommendation for a common sense solution that will help individuals save and take control of their own financial future; and

    Whereas, The Legislature recognizes that as an alternative to a state government-managed retirement program for small business employers and employees, a congruent study should be conducted to determine if the state would be better served by launching educational campaigns promoting existing retirement plan options currently available in the private sector to employers and employees, and through financial literacy programs to promote tax credits and incentives for 401(k) and other currently available retirement savings plans; therefore, be it

    Resolved by the Legislature of West Virginia:

    That The Joint Committee on Government and Finance is hereby requested to study the advisability and feasibility of creating a cost-effective and portable group government-managed retirement savings program made available to small businesses and their employees by the State Treasurer, including the compliance costs and legal implications to the state and its small businesses that could result from applicable federal law as well as the tax treatment accorded to the investment options pursuant to applicable federal law under such a program, or to encourage and promote currently available private sector financial and retirement security opportunities for small businesses and their employees through portable defined contribution plans, such as Simple IRA, SEP, 401(k), 457, Regular/Roth IRA and individual annuities, which are already available in the commercial marketplace; and, be it

    Further Resolved, That the Joint Committee on Government and Finance report to the regular session of the Legislature, 2015, on its findings, conclusions and recommendations, together with drafts of any legislation necessary to effectuate its recommendations; and, be it

    Further Resolved, That the expenses necessary to conduct this study, to prepare a report and to draft necessary legislation be paid from legislative appropriations to the Joint Committee on Government and Finance.