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June 9, 2025
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Virginia’s Retirement Mandate: Get to Know RetirePath VA
RetirePath Virginia, also known as RetirePath VA, helps private-sector workers who do not have access to a retirement savings plan save money they can use as income in retirement. When it was activated, Virginia joined a growing number of states with mandatory retirement plans. But, as a Virginia employer, how do you know if you are required to participate and what should you do if you already offer your employees access to a retirement savings plan like a 401(k)?
Virginia’s General Assembly passed legislation in 2021 to establish a state-run retirement savings program.
RetirePath VA went into effect in June 2023 and requires certain employers who do not already offer a retirement savings plan to provide one.
Employers that already offer a plan may apply for an exemption from RetirePath Virginia.
This guide, provided by Beyond, will help you understand when RetirePath became law, who must offer it, and how eligible employees can participate.
Rising costs of living mean many Americans struggle to set aside money for retirement. A study commissioned by Virginia529 (the state agency that also helps residents save for college) found that over one million workers in Virginia lack access to a retirement plan at work.
To address this, several states, including Colorado, New York, California, and Connecticut, have launched state-facilitated retirement savings programs, with Virginia joining via RetirePath VA.
In 2021, the Virginia General Assembly passed legislation establishing RetirePath VA. In June 2023, Virginia officially joined the list of states offering state-sponsored retirement plans.
Here’s what employers need to know:
Employers with 25+ employees, and in business for at least two years, must offer a qualified retirement plan.
This can be done via a private provider, a retirement plan administrator, or through the state-sponsored RetirePath Virginia program.
Employers don’t have fiduciary responsibilities and don’t pay fees. A small fee is deducted from employee accounts to cover administrative and investment costs.
RetirePath is also available to self-employed individuals, provided they have taxable income subject to payroll deductions.
Yes, employers can face penalties. If a business fails to register, they may be fined up to $200 per eligible employee per year, according to the RetirePath VA FAQ.
To participate, employees must:
Be at least 18 years old
Earn income in Virginia
Have worked 30+ hours during any part of a week in the previous 12 months
RetirePath VA uses a Roth IRA model with after-tax payroll deductions:
The default contribution rate is 5% of pay, deducted post-tax
Eligible employees are automatically enrolled within 30 days of hire, but participation is voluntary
Workers can opt out or switch to a traditional IRA
IRS contribution limits apply.
Offering a retirement plan helps employees build financial security and gives businesses a competitive edge. It boosts employee morale, improves retention, and can reduce turnover.
