If your business is eligible for the new Virginia retirement savings plan RetirePath (or the
“Program”) and it has not yet registered, it should do so to avoid potential enforcement penalties.
The registration deadline for newly eligible businesses was on October 30, 2024, and the
registration deadline for previously eligible businesses has also already passed. Registration for
eligible employers is mandatory, and employers who fail to comply with the new law may face a
penalty of $200 per eligible employee annually.
What Employers are Eligible?
Virginia employers are eligible for RetirePath if: 1) it has 25 or more eligible employees; 2) the
business has been operating for two or more years; and 3) the business does not already offer a
qualified employer-sponsored retirement savings plan.
What Employees are Eligible?
An employee is eligible under RetirePath if he or she: is at least 18 years of age, receive Virginia
income, and is employed at least 30 hours a week.
What is RetirePath?
RetirePath is a state-facilitated IRA savings plan managed by Commonwealth Savers, an
independent agency of Virginia, designed to expand access to retirement savings for private
sector employers. The new program does not replace or compete with employer-sponsored
retirement plans, and RetirePath does not provide benefits that other retirement plans offer, such
as employer matching.
Eligible Employer Obligations?
Eligible employers are to register for RetirePath. The registration deadline for newly eligible
employers was October 30, 2024, and for businesses eligible earlier, the deadline was back in
February. A link to register is available here: https://retirepathva.vestwell.com/register/employer
When an employer registers for RetirePath, the business must provide a basic employee roster,
which will enable RetirePath to contact eligible employees to set up an account. Employers are
required to maintain their employee rosters and submit employee contributions each pay period.
Employers may work with their payroll provider to facilitate implementation of RetirePath.
Can an Eligible Employer be Liable for Investment Decisions?
Virginia statute provides that participating employers “shall not have any liability for a
participating employee’s decision to participate in or opt out of the Program or for the investment
decisions of participating employees whose assets are deposited in the Program.” It also declares
that participating employers are not fiduciaries and shall not be considered to be fiduciaries over
the Program. The Program is a state-administered program, not an employer-sponsored program.
What are Employer Obligations for New Employees?
Eligible employers are required to add new employees to RetirePath within 90 days of an
employee’s first paycheck, which will enable RetirePath to send a notification to the employee,
permitting the employee to act within 30 days of the notification.
Can Eligible Employees Elect Not to Participate?
The statute requires that each eligible employee of an eligible employer be enrolled in RetirePath
unless the employee elects not to participate in the Program in a manner prescribed by the Board.
The statute also provides that a participating employee may also terminate his participation in
RetirePath at any time in a manner prescribed by the Board.
Is a Participating Employer Required to Obtain Signed Authorizations for Payroll Deductions
under the Program?
No. The statute provides that the Program shall be exempt from the provisions of subsection C of
§ 40.1-29, which is the Virginia Code provision requiring, among other things, that employers
obtain signed, written authorizations from employees for payroll withholdings.
Brendan F. Cassidy is an attorney at Praemia Law, PLLC. This article is for general
informational purposes only and should not be relied upon or regarded as legal advice. Please
contact Brendan Cassidy at brendan.cassidy@praemialaw.com or 703-399-3603 concerning
particular facts and circumstances.
