Virginia
On April 15th, 2021, Governor Ralph Northam (D) signed the Virginia Saves Act into law, which implemented a statewide retirement savings program for all private-sector employees in the state not currently enrolled in a retirement plan to electively participate in a state-facilitated automatic enrollment individual retirement account (IRA) program.
Legislative Summary:
House Bill 2174 was sponsored by Representative Luke Torian (D) in January 2021, which passed the House on January 26th and the Senate on February 27th. The program was renamed Virginia RetirePath.
Program Description:
The Virginia RetirePath program is administered by the Governing Board of the Virginia College Savings Plan, to provide a state-facilitated payroll-deduction individual retirement savings plan for private sector employees who do not have access to employer-sponsored retirement savings plans.
Affected Employers:
All employers with 25+ employees that have been in operation for at least two years, and do not currently offer a qualified retirement plan. Employees must be over 18 years of age and work 30+ hours per week.
General Requirement:
Automatic enroll employees at 5% deferral with annual increases of 1% (up to a maximum of 10%) of the enrollee’s wages.
Launch Status:
July 1, 2023
Full Implementation:
February 15, 2024
Compliance Deadline:
February 15, 2024 – 25+ employees
Non-Compliance Penalties:
$200/ employee for every calendar year the plan is out of compliance.
Employer Costs:
Undetermined
Employee Costs:
Undetermined
Investments:
The program is anticipated to offer a suite of target date funds (TDFs), as the default investment option, and additional investment options – including a capital preservation, fixed-income, equity funds.