VIRGINIA RETIREMENT PLAN STATE MANDATE: HELP BUSINESS OWNERS BENEFIT

  • In 2021, the Virginia General Assembly directed Virginia529 to create a state-facilitated retirement savings program, which launched in 2023. Under this mandate, employers that have been in business for at least two years and have 25 or more employees must either enroll in the state program or offer a qualified retirement plan to their workforce.

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      Contact your Regional Plan Consultant
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What You Should Know

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      Deadline:
      • For newly eligible businesses, the registration deadline is typically October 30 of the following year after meeting the criteria.
      • Earlier deadlines (e.g., February 15, 2024) applied to previously notified businesses.
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      Requirements:
      • Employers operating for two or more years.
      • Have 25 or more eligible employees.
      • Do not already offer a qualified retirement plan (e.g., 401(k), 403(b), SIMPLE IRA).
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      Penalties for Non-Compliance:
      • Employers who do not comply with Virginia’s retirement savings mandate may face financial penalties. The law allows for fines of up to $200 per eligible employee, per year for failing to register for the state program or certify that you offer a qualified retirement plan.
      • Penalties apply for each calendar year (or portion) that an eligible employee was not enrolled and had not opted out.
      • The State Treasurer may waive penalties if:
        • The employer did not know of the failure and exercised reasonable diligence.
        • The employer corrects the issue within 90 days of discovery.
        • Failure was due to reasonable cause and not willful neglect.

      You can help your clients avoid these fines and offer a retirement plan that will:

      • Comply with the Virginia mandate
      • Reduce taxes
      • Control costs
      • Attract and retain top talent
      • Maximize business value
      • Enable them to work with their preferred business partners

RetirePath Virginia OR Customized Plan?

RetirePath Virginia is a basic, one-size-fits-all retirement savings program for businesses that do not wish to sponsor a plan for their own employees. Yet there are many businesses that would be better served with a plan from TRA that’s customized to their needs.

RetirePath Virginia Custom 401(k) from TRA
Pre- and Post-Tax Deferrals Roth IRA w/ auto after-tax payroll deduction Pre-tax or Roth elective deferral contributions
Contributions $7,500 – ($8,600 age 50+) Lesser of 100% of compensation or $24,500
Catch-Up Contributions Determined by Roth IRA contribution limits $8,000 annually for those age 50 and older
Employer Match Employers cannot contribute to the program such as matching funds. Available
Income Limit Savers not eligible for the default Roth IRA have the option to recharacterize contributions to a traditional IRA No income limits
Investment Choices Limited selection of low-cost investment options Can provide a wide variety from top asset managers
Automated Payroll Integration Available Available
Customizable for businesses Not customizable Yes – for example, Safe Harbor, SIMPLE, Profit-Sharing & Cash Balance
Tax Credit No, since there are no start-up costs for employers Yes – 100% of the expenses paid up to the greater of $500 or the lesser of $250 for each non-HCE’s. A maximum tax credit of $5,000 per year would be available for 3 years.

TRA Plans to Consider

For Virginia businesses who want to sponsor a retirement plan, some plans to consider include:

• 401(k)
• Safe Harbor 401(k)
• Cross Tested Profit-Sharing Allocation
• 401(k) plus Cash Balance Plan

Other alternatives to RetirePath Virginia include SIMPLE 401(k) Plans, Group 401(k) Plans (MEPs, PEPs and Aggregation Programs), and 403(b) Plans (for non-profits).

COMPARE PLANS

Working closely with you, TRA will create a customized plan that meets your client’s business. We partner with top recordkeepers and investment managers around the country and deliver exceptional client service. We also offer 3(16) Plan Administration Relief Services (PARS) to relieve business owners of day-to-day plan administration responsibilities and manage their fiduciary risk.

Complete the form below and one of TRA’s Regional Plan Consultants will be in contact with you.

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Consider TRA's 3(16) Fiduciary Services & Plan Administration

To alleviate the day-to-day administrative burdens of yours or your clients retirement plans.
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