Today, more than 1 million private-sector Virginia workers are on their own when it comes to saving for retirement. Businesses can struggle with the administrative hurdles, fiduciary responsibilities and costs that come with providing an employer-sponsored retirement savings option.
RetirePath Virginia is the Commonwealth’s solution to help increase access to retirement savings. Under a new state law, certain Virginia businesses are required to either register for RetirePath or offer their own qualified retirement plan. For employers eligible in 2023, the state-mandated registration deadline is Feb. 15, 2024.
“The sooner employers register, the sooner their employees can begin saving,” said Mary Morris, CEO of Virginia529, the independent state agency that manages RetirePath Virginia. “RetirePath addresses the retirement savings gap head-on by offering more Virginians the chance to save at work.
What employers need to know
RetirePath gives employers a simple way to help their employees save for the future, with no employer fees, no fiduciary responsibility, and minimal administrative requirements.
The program is mandatory for certain Virginia for-profit and non-profit employers. Businesses are required to participate if they have 25 or more eligible employees, have been operating for more than two years, and do not currently offer a workplace retirement savings option.
“We received an email about RetirePath. We felt like it was a no-brainer,” said Amy Navejas with Affordable Lifts in Lynchburg, Virginia. “This was available without any additional cost to the business, and it gives our staff a way to save for their future.”
Employers can visit RetirePathVA.com/employers to learn more and respond.
What employees need to know
Employee participation is voluntary and flexible. After an employer registers, eligible employees have 30 days to opt out or adjust their account. If an employee takes no action, they enroll automatically with the program’s default savings and investment selections.
“Being able to plan for my future while having this cool job is exciting,” said Kelly Crisafulli, piercer at River City Tattoo in Richmond. “I love doing what I do, but I can’t see myself bending over and piercing people when I’m 80. Saving for retirement with RetirePath brings me some peace-of-mind.”
Contributions default to a Roth individual retirement account (IRA). The standard savings rate is 5% of the employee’s total pay. However, employees can opt out, change their savings rate, or customize their account at any time.
Virginians who are self-employed or don’t work for an employer registered with RetirePath can open an account and save on their own. Get started at RetirePathVA.com/savers.
RetirePath Virginia program details
RetirePath is the result of a statewide effort to bolster retirement security for Virginia workers. In the absence of a nationwide solution, many states are establishing state-facilitated retirement savings programs such as RetirePath.
Virginia is the seventh state to launch an automatic-enrollment, state-facilitated retirement savings program. RetirePath is managed by Virginia529, an independent agency of the Commonwealth of Virginia.
To learn more about RetirePath Virginia, visit RetirePathVA.com.
