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.
What is RetirePath VA?
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.
Why Virginia Created RetirePath
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:
- Increasing access to retirement plans for workers across the state.
- Reducing future dependence on public assistance programs.
- Supporting employers in offering benefits without significant costs or effort.
Who Must Register for RetirePath VA?
RetirePath Virginia is mandatory for certain businesses, with exemptions and voluntary participation options for others.
Mandatory Participation
Businesses must register for RetirePath if they:
- Have 25 or more employees.
- Have been operating for at least two years.
- Do not already offer a qualified retirement plan, such as a 401(k) or 403(b).
Voluntary Participation
Smaller businesses with fewer than 25 employees can also join RetirePath voluntarily if they want to enhance their benefits package.
Exemptions
Employers that already offer a qualified retirement plan are exempt from participating.
What Happens if You Don’t Register?
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.
Benefits of RetirePath VA for Employers
RetirePath Virginia is designed with businesses in mind, offering several advantages:
- Cost-Effective Compliance: There are no direct costs for employers to join RetirePath. Employers are not required to match employee contributions, making it an affordable solution for compliance.
- Simplified Administration: RetirePath Virginia handles much of the administrative work. Employers simply enroll their eligible employees and set up payroll deductions—RetirePath takes care of the rest.
- Improved Employee Retention: Offering retirement benefits could boost your company’s appeal, helping you attract and retain top talent in today’s competitive job market.
How to Get Started with RetirePath VA
Getting started with RetirePath is straightforward. Follow these steps to ensure full compliance while offering your employees a meaningful and valuable benefit:
- Register Your Business: Visit the official RetirePath Virginia portal to sign up.
- Enroll Employees: Automatically enroll all eligible employees. Employees can choose to opt out.
- Set Up Payroll Deductions: Enable automatic payroll deductions to simplify employee contributions.
- Access Ongoing Support: RetirePath Virginia provides resources and assistance to make the process smooth and efficient.
FAQs About RetirePath VA
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.
