Add Virginia to the list of states offering auto-IRAs. RetirePath Virginia will open by July 1, 2023, according to Virginia529 CEO Mary Morris. The program will provide Virginians who don't have access to a workplace retirement savings plan with the option to save a portion of their pay in a professionally managed individual retirement account.
Virginia529, the largest 529 college savings plan in the country, with more than $97 billion in assets under management and 3 million accounts as of March 31, will oversee RetirePath Virginia.
Under state legislation, private-sector Virginia businesses that have 25 or more eligible employees, have been operating for more than two years and aren't offering a retirement savings option will be required to enroll in RetirePath Virginia, according to Virginia529. Employee participation will be voluntary.
“Almost half of Virginia workers do not have access to a retirement savings plan through their employer,” Morris said in a statement. “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.”
Virginia529 selected Vestwell, which already administers state-facilitated retirement savings programs in Oregon and Connecticut, as the RetirePath Virginia program administrator and BlackRock as the investment manager. BlackRock currently provides investment services for other Virginia529 programs. BNY Mellon will provide record keeping, custodial services, and customer support to participants.
“We’re proud to partner with Virginia529 to power the innovative RetirePath Virginia program,” Aaron Schumm, founder and CEO of Vestwell, said in the statement. “All Americans deserve an affordable vehicle to save for their financial future, and Virginia is bringing us one step closer to closing the savings gap.”
Virginia’s program is part of a larger national trend toward auto-IRAs. As 2021 ended, more than 20 states and cities had introduced legislation to establish new programs or form study groups to explore their options, according to Georgetown University’s Center for Retirement Initiatives. Since 2012, at least 46 states have acted to implement a new program, study program options or consider legislation to establish state-facilitated retirement savings programs.
“Virginia529 is recognized as one of the best-managed and successful college and ABLE state savings programs in the nation. Thousands of Virginia workers will soon be able to take advantage of a first-class organization to also help them save for retirement,” said Angela Antonelli, executive director of Georgetown University’s Center for Retirement Initiatives.
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