The new RetirePath Virginia program makes it easier than ever for businesses to offer retirement savings, even if traditional plans like 401(k)s have been out of reach. This guide will explain what you need to know, including how it works, who must participate, and why it benefits both employers and employees.
RetirePath Virginia is a state-facilitated retirement savings program that helps businesses offer Individual Retirement Accounts (IRAs) to their employees. With automatic payroll deductions and minimal administrative requirements, it’s a simple and affordable way for employers to comply with Virginia’s new retirement savings mandate.
Employers with 25 or more employees who have been operating for at least two years are now encouraged to provide a retirement savings option for their team. For businesses without an existing plan, RetirePath Virginia offers an alternative. By registering with RetirePath, employers can ensure they meet the new state guidelines and avoid potential penalties.
Many Virginians face a retirement savings crisis. Studies show that nearly 50% of workers nearing retirement age have little to no savings. RetirePath Virginia addresses this issue by:
RetirePath Virginia is mandatory for certain businesses, with exemptions and voluntary participation options for others.
Businesses must register for RetirePath if they:
Voluntary Participation
Smaller businesses with fewer than 25 employees can also join RetirePath voluntarily if they want to enhance their benefits package.
Employers that already offer a qualified retirement plan are exempt from participating.
Virginia imposes penalties for non-compliance with RetirePath requirements. Businesses that fail to register or certify their exemption by the deadline may face a $200 annual penalty per eligible employee.
RetirePath Virginia is designed with businesses in mind, offering several advantages:
Getting started with RetirePath is straightforward. Follow these steps to ensure full compliance while offering your employees a meaningful and valuable benefit:
Can I Still Offer a 401(k) or Other Plans?
Yes! RetirePath doesn’t restrict you from offering additional retirement plans if you want to provide more comprehensive benefits.
Who Manages Employee Investments?
Professional fund managers oversee employee accounts, ensuring proper management and compliance under state oversight.
What Happens if Employees Don’t Want to Participate?
Employees can opt out of the program at any time if they choose not to contribute.
At YHB, we understand the challenges businesses face when navigating new mandates and balancing employee benefits with operational demands. RetirePath Virginia offers a practical, cost-effective solution to comply with the state’s retirement savings requirements while enhancing your benefits package.
As a trusted partner to businesses across the region, YHB is here to help you every step of the way. Whether you need assistance with registration, payroll setup, or understanding how RetirePath aligns with your overall benefits strategy, our team is ready to guide you through the process.