(The Center Square) – Virginia’s state-run retirement savings program has nearly tripled in size since fiscal year 2024, according to a new legislative oversight report.
The Joint Legislative Audit and Review Commission found RetirePath Virginia had 24,844 retirement accounts holding $27.3 million in assets as of March 31, up from about 8,900 accounts and $4 million in fiscal year 2024. The average funded account held about $1,100.
RetirePath provides individual retirement accounts for private-sector employees whose employers do not offer a workplace retirement plan. Employees are automatically enrolled with a default 5% contribution rate. Under the program, the contribution rate automatically increases by 1 percentage point each year until it reaches 10%, unless participants choose a different rate.
The report comes after Senate Bill 149 took effect July 1, expanding the program to employers with at least five employees, regardless of whether those employees work full or part time. Previously, the program applied only to employers with at least 25 full-time employees that did not offer a qualified retirement plan.
The commission estimated the expansion will make about 357,000 additional workers eligible for RetirePath. Commonwealth Savers, which administers the program, is rolling out the expansion in phases through the end of October, beginning with employers that have 10 to 24 employees before expanding to employers with five to nine employees.
The report said Commonwealth Savers is still developing an enforcement process for employers that fail to comply with the law. State law authorizes penalties of up to $200 per eligible employee each year, but the agency has focused on education and outreach while working with the Office of the Attorney General and the Virginia Department of Labor and Industry on enforcement options.
The commission said additional legislation may be needed if the Labor Department is given enforcement authority.
According to the Joint Legislative Audit and Review Commission, employers may be considered out of compliance if they fail to register with the program or certify an exemption, fail to submit payroll contributions for eligible employees, or fail to add new employees or update employee information.
The report found all of RetirePath’s investment options met or exceeded their adjusted benchmarks through March 31.
Beyond the retirement program, the commission found the Commonwealth Savers Plan’s Defined Benefit 529 Fund remained well funded, with a funded status of 232% and an actuarial reserve of about $1.5 billion as of Dec. 31.
The Joint Legislative Audit and Review Commission periodically reviews the Commonwealth Savers Plan, which administers Virginia’s retirement savings and college savings programs.
