New Virginia Law Expands RetirePath in 2026: What Small Business Owners Need to Know

Virginia law has changed, and it may now require your small business to give employees access to a workplace retirement savings option, even if your company has never offered a retirement plan before.

As of July 1, 2026, RetirePath Virginia applies to employers with as few as five eligible employees, down from the previous threshold of 25. Participation is mandatory for businesses that meet the program’s requirements and do not offer another qualified employer-sponsored retirement plan.

What Is RetirePath Virginia?

RetirePath Virginia is a state-facilitated retirement savings program for employees who do not have access to a qualified retirement plan through work.

Employees save through payroll deductions into individual retirement accounts. The accounts belong to the employees, not the employer, and remain with them if they change jobs.

The program uses automatic enrollment, but employees are not required to participate. They can opt out or change their contribution rate.

Does Your Virginia Business Have to Register?

Your business is required to participate in RetirePath if it:

• Has operated for at least two years
• Had five or more eligible employees as of December 31 of the previous calendar year
• Does not sponsor, maintain, or contribute to a qualified employer-sponsored retirement plan

The requirement applies to both for-profit businesses and nonprofit organizations.

Eligible employees must be at least 18 years old and receive wages. Part-time employees who meet those requirements count toward the five-employee threshold.

Businesses that already offer a qualified plan, such as a 401(k), SIMPLE IRA, SEP IRA, or 403(b), do not have to participate in RetirePath. If your business receives a notice from the program, you must use the provided access code to certify that exemption.

What Are Employers Required to Do?

If your business participates in RetirePath, you will be responsible for:

• Registering by the required deadline
• Providing information for eligible employees
• Setting up payroll deductions
• Sending employee contributions to the program
• Keeping employee and payroll information current

You do not contribute money, pay program fees, manage employee accounts, select investments, provide investment advice, or serve as a fiduciary for the accounts.

Contact your payroll provider as soon as you determine that your business must participate. Your payroll setup and internal procedures may need to be updated before employee deductions can begin.

How Does RetirePath Work for Employees?

Eligible employees are automatically enrolled unless they opt out. The default contribution is 5% of compensation, deducted through payroll and deposited into a Roth IRA in the employee’s name.

Employees can change their contribution rate, opt out, or keep the account after leaving your company.

Should You Use RetirePath or Offer Your Own Retirement Plan?

RetirePath may be the simplest way for a small business to meet Virginia’s requirement because employers do not contribute funds, pay program fees, or manage investments.

Businesses that want more flexibility may prefer a 401(k), SIMPLE IRA, SEP IRA, or another qualified plan. Those options can involve higher costs and administrative overhead, but they may offer employer contributions, potential tax benefits, and greater value for recruiting and retention.

The right choice depends on your workforce, budget, tax position, hiring plans, and long-term business goals. Your attorney, accountant, financial advisor, and payroll provider may each play a role in evaluating and implementing that decision.

What Should Virginia Business Owners Do Now?

If you received a RetirePath notice, follow the instructions and deadline provided. Use the access code to register for the program or certify that your business is exempt because it offers a qualifying plan.

If your business meets the RetirePath requirements but you have not received a notice or access code, contact RetirePath Virginia or request an access code through the program rather than waiting for a letter to arrive.

If you decide to use RetirePath, contact your payroll provider so any necessary payroll changes can be made before employee deductions begin.

What Happens If Your Business Does Not Comply?

Eligible employers must register for RetirePath or certify that they offer a qualified retirement plan.

For 2026, the registration deadline is:

• September 30, 2026, for employers with 10–24 eligible employees
• October 30, 2026, for employers with 5–9 or 25 or more eligible employees

Businesses that fail to comply may face an annual penalty of up to $200 for each eligible employee.

Talk With a Virginia Business Attorney

The 2026 RetirePath Virginia expansion affects many small businesses that have never had to address a workplace retirement savings program.

The Geller Law Group’s experienced Business Law team can help Virginia business owners determine whether the law applies, understand their responsibilities, and evaluate how retirement plan decisions fit into the company’s broader business and workforce strategy. Contact us today if you have questions. 

Helpful Resources

Register Your Business for RetirePath Virginia

Employer Benefits for Using RetirePath Virginia

RetirePath VA FAQs

Contact RetirePath VA