Virginia’s new state-facilitated private retirement program, called RetirePath Virginia, will open by July 1, 2023, according to a June 2 statement from Virginia529, charged with establishing and overseeing the program by state legislation.
“Almost half of Virginia workers do not have access to a retirement savings plan through their employer,” said Virginia529 CEO, Mary Morris. “RetirePath Virginia is an innovative solution to address the Commonwealth’s growing retirement savings divide. The program is a logical expansion of the Virginia529 mission, boosting access and promoting financial wellness to even more Virginians.”
As in other state-based IRA programs, RetirePath Virginia is intended to provide residents who don’t otherwise have access to a workplace retirement savings plan the option to save a portion of their pay in a professionally managed IRA account. Virginia529 selected Vestwell as the RetirePath Virginia program administrator and BlackRock—which provides investment services for other Virginia529 programs—as the primary investment manager.
Vestwell, in partnership with BNY Mellon, will provide recordkeeping, custodial services, and customer support to participating RetirePath Virginia employers and employees. Vestwell administers state-facilitated retirement savings programs in Oregon and Connecticut, as well as programs in development for Maryland, Colorado and New Mexico.
“We’re seeing more and more states playing a central role in closing the retirement savings gap across the country.”
Aaron Schumm, Vestwell
“There’s a monumental shift happening in the retirement industry,” said Aaron Schumm, Founder and CEO of Vestwell. “We’re seeing more and more states playing a central role in closing the retirement savings gap across the country. We’re proud to partner with states like Virginia who are pioneering the way small businesses and their employees will achieve a secure financial future.”
Today, one in four adults in the United States do not have any retirement savings. States and their private-sector partners have proven to effectively serve small business employers with an affordable and user-friendly savings solution for their employees.
“RetirePath Virginia is an essential program to help make savings more accessible for all Virginians,” said Douglas Magnolia, President of Vestwell. “We’re thrilled to partner with Virginia529 and offer a personalized savings experience on our state-of-the-art platform while reducing the administrative burden for the state and its small businesses alike.”
Under state legislation, private-sector Virginia businesses meeting certain criteria—25 or more eligible employees, operating for more than two years, and not offering a retirement savings option—will be required to enroll in RetirePath Virginia. The pilot program is scheduled to begin in early 2023 and phased enrollment will start by July 1, 2023. RetirePath Virginia will be simple to administer and fee-free for employers. Employee participation will be voluntary.
Virginia529 is responsible for RetirePath Virginia program design, oversight and outreach activities. With more than $97 billion in assets under management and 3 million accounts as of March 31, 2022, Virginia529 is the largest 529 plan available. To support the agency’s leadership and board, Virginia529 established a retirement program advisory committee with experts in retirement plan design, investment management, and business.
Learn more about RetirePath Virginia at Virginia529.com/retire.
SEE ALSO:
• Vestwell to Power Colorado-New Mexico Auto-IRA Program
• Hawaii Approves State-Run IRA, but Minus Auto-Enrollment
• New Jersey Auto-IRA Program Kicks Off March 28