RetirePath Virginia Plan Administrator Named on the Road to Launch

A program administrator and investment manager have been named for RetirePath Virginia, the state-run program that will provide retirement plan coverage to Virginians whose private-sector employers do not, as it approaches the July 1, 2023 launch date.

Then-Gov. Ralph Northam (D) on May 7, 2021 signed into law HB 2174, the measure establishing the program. The bill had been introduced by Del. Luke Torian (D-Dumfries); the House of Delegates quickly passed it in late January of that year, and the Senate later followed suit. It was sent to Northam, but he returned it to the General Assembly with a recommendation to remove a provision that limits eligible employees in the program to employees who work a minimum of 30 hours per week. The House of Delegates approved Northam’s recommendation April 7, but the state Senate rejected it. Despite the failure of his recommendation, Northam signed it into law anyway. 

The program, an automatic enrollment, payroll deduction IRA program, will be optional for employees and portable between eligible employers. Employers with 25 or more full-time employees that do not already offer a retirement benefit will be required to allow employees to participate. A pilot program is scheduled to start in early 2023, and phased enrollment is set to begin on or near July 1, 2023.

The legislation creating the program provides that Virginia529, an independent, self-sustaining agency of the Commonwealth of Virginia that administers the state's 529 progam, is to establish and oversee the program. Almost half of Virginia workers do not have access to an employer-provided retirement plan, Virginia529 CEO Mary Morris noted in a press release, calling RetirePath Virginia “an innovative solution to address the Commonwealth’s growing retirement savings divide.” 

Virginia529 has selected Vestwell as the RetirePath Virginia program administrator and BlackRock as the investment manager. Vestwell, in partnership with BNY Mellon, is to provide recordkeeping, custodial services and customer support to participating RetirePath Virginia employers and employees. Vestwell already administers similar state-run programs in Oregon and Connecticut, and will be serving those established in Colorado and New Mexico as well.

“We’re proud to partner with Virginia529 to power the innovative RetirePath Virginia program,” said Aaron Schumm, founder and CEO of Vestwell in a press release.