Virginia unemployment insurance fund trust fund reaches key solvency level
Virginia’s unemployment insurance fund trust fund is solvent, which is newsworthy because for the past couple of years, there had been questions there, because of the pressure from the COVID pandemic.
The Virginia Employment Commission announced today that as of Dec. 2, the trust fund balance available for benefits is $1,466,766,128, a level of solvency that will allow the state to lift the $16 per employee fund builder tax on employers next year.
“The economic recovery from the pandemic, coupled with actions taken by the governor and General Assembly to make additional investments into the unemployment insurance trust fund, has resulted in the trust fund returning to pre-pandemic levels and creating stability in the fund,” said Carrie Roth, Commissioner of the VEC and Advisor to the Governor for Strategic Initiatives.
There are three components that make up unemployment insurance taxes: base, pool, and fund builder. Every year the trust fund solvency percentage is calculated by dividing the adequate fund balance by the actual trust fund balance.
The $16 per employee fund builder tax kicks in for solvency percentages less than 50 percent. Virginia’s trust fund solvency has now reached 55 percent.
In previous sessions of the Virginia General Assembly, the unemployment insurance taxes were capped at their calendar year 2021 levels. While an employer can improve their tax rates, they will not exceed those paid in calendar year 2021 unless they are delinquent in remitting their taxes.
Between December 2020 and June 2022, the General Assembly also authorized deposits of over $1.2 billion in federal CARES Act and ARPA funding into the trust fund.