RetirePath Virginia Expansion: What Employers Need to Know in 2026

RetirePath Virginia expands to employers with five or more employees

When Virginia launched RetirePath pilot phase in 2023, the program primarily affected employers with 25 or more employees that had been operating for at least two years and did not offer a qualified retirement plan. Since then, thousands of Virginia businesses have either registered with the state-facilitated program or established their own retirement plans to satisfy the requirement.

Now, Virginia is entering the next phase of the program.

RetirePath is expanding on July 1, 2026

Under recently enacted legislation, RetirePath Virginia is expanding from the original 25 employee threshold to include additional employers. Employers will be required to either:

• Register and facilitate RetirePath Virginia, or
• Offer a qualified employer-sponsored retirement plan.

This expansion reflects Virginia’s ongoing effort to increase retirement savings access for workers who may not have access to a workplace retirement plan.

Who must participate

You must register for RetirePath (or offer your own qualified plan) by July 1 if your business:

• Has five or more eligible employees, part-time employees are included toward the minimum threshold
• Has been operating in Virginia for at least two years
• Does not already offer a qualified employer‑sponsored retirement plan

Who are the eligible employees?

For businesses that meet the above criteria, all employees must be enrolled in RetirePath within 90 days of joining the business if they are:

• At least 18 years old
• Working at least 30 hours per week
• Working more than 90 days per year
• Earning taxable wages from a Virginia employer

Understanding the RetirePath option

RetirePath is a state-facilitated Roth IRA program funded through employee payroll deductions. Employees are automatically enrolled unless they opt out, and employers are responsible for facilitating payroll deductions and maintaining employee records. Employers do not contribute to employee accounts and generally do not assume fiduciary responsibility for investments.

For many employers, RetirePath offers a straightforward compliance solution with minimal administrative burden. However, business owners should understand its limitations:

• Employer matching contributions are not permitted.
• Contribution limits are lower than many employer-sponsored plans.
• Investment options are more limited than those available through most private retirement plans.
• The program may not fully address the retirement savings goals of owners and highly compensated employees.

Should employers consider their own retirement plan?

Employers can satisfy the requirement without participating in the state-sponsored program.

Establishing a qualified retirement plan, such as a 401(k), SIMPLE IRA, or SEP IRA, can satisfy Virginia’s requirements while providing additional flexibility and benefits. Depending on the employer’s goals, a private plan may allow for:

• Employer matching or profit-sharing contributions,
• Higher contribution limits,
• Greater flexibility in plan design,
• Improved employee recruitment and retention, and
• Enhanced retirement savings opportunities for business owners and key employees.

Additionally, federal tax credits remain available to many small businesses that establish new retirement plans, helping offset startup and administrative costs.

Action items for employers

Employers should take proactive steps to evaluate their options before receiving a compliance notice:

1. Confirm whether your organization may become subject to the expanded requirements.
2. Review any existing retirement benefits to determine whether they satisfy the state’s exemption criteria.
3. Evaluate whether a qualified retirement plan could better support your workforce and business objectives.
4. Consult with your retirement plan advisor, CPA, or employee benefit specialist to assess plan design, compliance requirements, and available tax incentives.

The expansion of RetirePath creates both compliance obligations and strategic opportunities for Virginia employers. While the state-sponsored program may be appropriate for some organizations, many businesses can benefit from implementing a retirement plan tailored to their workforce and long-term goals.

Additional resources

• Review future notices from the Commonwealth Savers Plan Board.
• Access RetirePath VA website and resources

The Keiter Employee Benefit Plan Audit team will continue to keep you updated on new and changing regulations that may impact your business’s retirement plan. Questions on this topic? Contact your Keiter Opportunity Advisors.