What is RetirePath Virginia, the State-Mandated Retirement Savings Program?
In 2023, the Commonwealth of Virginia launched RetirePath Virginia, a statewide program to address the growing retirement savings gap. Before the program, approximately 45% of Virginia’s private-sector workforce lacked access to a workplace retirement savings plan.
The main reason many employees don’t save for retirement is a lack of access to a plan through work. To address this issue, Virginia legislators adopted an innovative approach. In 2021, the Virginia General Assembly passed legislation requiring certain Virginia businesses to either register for RetirePath or offer their own qualified retirement plan.
Cultivating a New Culture of Saving
RetirePath registration opened in 2023. In the program’s first year, more than 10,000 private-sector workers began saving through automatic paycheck contributions to their own Individual Retirement Accounts (IRAs).
“RetirePath is successfully addressing Virginia’s retirement savings gap by offering more Virginians the chance to save at work,” said Peter Thompson, RetirePath Program Director. “Many RetirePath participants are first-time savers who are building a more secure financial future. We’re encouraged by this early momentum and the program’s potential to make a long-lasting, positive impact.”
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 businesses, both for-profit and non-profit. Companies must participate if they have 25 or more eligible employees, have been in business for over two years, and do not already offer a retirement savings option.
“I had one phone call with a RetirePath representative, and we got everything set up,” said Amanda Russell, controller at ActivWall Systems in Martinsville, Va. “After a few employee meetings, we were good to go!”
Businesses that become eligible for RetirePath in 2024 must register by October 30, 2024. Employers can learn more at RetirePathVA.com/employers.
What Employees Need to Know
Employee participation is voluntary and flexible. Once an employer registers, eligible employees have 30 days to opt out or adjust their account settings. If no action is taken, employees are automatically enrolled with the 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, Va. “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 go into a Roth individual retirement account (IRA), and the standard savings rate is set at 5% of an employee’s pay. However, employees can change their savings rate, customize their account, or opt out entirely at any time.
Virginians who are self-employed or whose employer isn’t registered with RetirePath can still open an account on their own at RetirePathVA.com/savers.
RetirePath Virginia℠ is helping to close the retirement savings gap and giving more workers the opportunity to build a secure financial future.
Visit RetirePathVA.com for more information and to obtain program materials. RetirePath Virginia℠ is governed by the Board of Commonwealth Savers Plan (“the Board”), an independent agency of the Commonwealth of Virginia. Vestwell State Savings, LLC (“Vestwell”), dba Sumday Administration (“Sumday”), is the program administrator. Sumday and The Bank of New York Mellon are responsible for day-to-day program operations. Participants who use RetirePath Virginia℠ beneficially own and have control over their individual retirement accounts (“IRA”), as provided in the program offering set out at RetirePathVA.com. Account balances in RetirePath Virginia℠ accounts will vary with market conditions and are not guaranteed or insured by the Board, the Commonwealth of Virginia, the Federal Deposit Insurance Corporation (“FDIC”) or any other organization. Prospective participants should seek the advice of a professional concerning any financial, tax, or legal implications related to opening and maintaining a RetirePath Virginia℠ account. © 2024 Commonwealth Savers Plan. All Rights Reserved.